In a $2 billion transaction, General Mills relinquishes its North American yogurt business operations to concentrate on its more robust brand offerings.
According to a report from Reuters in April, General Mills was considering selling its U.S. yogurt business, which includes brands like Yoplait and Liberté, with help from investment bank JPMorgan Chase.
Companies in the packaged food industry are shedding underperforming units to control costs and boost their core brands as consumers look for cheaper options.
CEO Jeff Harmening stated that the sale would allow the company to concentrate on its high-margin key brands.
Yoplait is facing stiff competition in the U.S., mainly from Chobani, a privately held yogurt brand, and Danone's Dannon brand.
The North American yogurt business accounted for approximately $1.5 billion in General Mills' net sales for fiscal 2024.
General Mills expects to close the deals in 2025, at which point its adjusted earnings per share will decrease by around 3%.
Earlier in the day, Bloomberg News reported that General Mills was in talks to sell its North American yogurt operations to Groupe Lactalis and Sodiaal.
Yoplait was founded by a group of French dairy farmers in 1964 and partnered with General Mills in 1977 through a franchise agreement, granting the maker of Bisquick exclusive rights to market the brand in the U.S. In 2011, General Mills acquired a 51% stake worth $1.2 billion in Yoplait from private equity firm PAI Partners and French dairy cooperative Sodiaal, which retained the remaining stake. In 2021, General Mills sold its European Yoplait operations to Sodiaal.
The decision to sell the U.S. yogurt business could be part of a widespread trend among packaged food companies to focus on their profitable core brands. With stiff competition from brands like Chobani and Dannon, the sale might aid General Mills in improving its financial performance and competitive position.
