General Mills The company announced that it has signed definitive agreements to sell its North American yogurt business to two leading French dairy companies, Lactalis and Sodiaal, in an all-cash transaction worth $2.1 billion. Following closing, the U.S. and Canadian operations will operate independently, with Lactalis acquiring the U.S. business and Sodiaal acquiring the Canadian business. The proposed transaction is expected to close in 2025, subject to receipt of necessary regulatory approvals and other customary closing conditions.
The sale includes the U.S. and Canadian operations of several yogurt brands, including Yoplait, Liberté, Go-Gart, Oui, Mountain High and :ratio, as well as manufacturing facilities in Murfreesboro, Tennessee, Reed City, Michigan, and Saint-Hyacinthe, Quebec. The North American yogurt business contributed a combined total of approximately US$1.5 billion to General Mills’ fiscal 2024 net sales.
“Today’s announcement marks another major step forward for General Mills as we advance our Accelerate strategy and portfolio restructuring ambitions,” said Jeff Harmening, chairman and chief executive officer of General Mills. “When completed, these divestitures will represent approximately 30% of our net sales transformation since fiscal 2018. By efficiently managing our portfolio and focusing on global platforms and valuable local brands with better growth prospects and more attractive margins, we will be better positioned to generate top shareholder returns over the long term.”
“I would also like to take this opportunity to thank our North American yogurt team members for their significant contributions,” Harmening continued. “We believe Lactalis and Sodiaal are the right homes for their dairy-focused owners to drive the success of our employees and the future growth of these brands.”
General Mills expects the transaction to be approximately 3 percent dilutive to its adjusted earnings per share in the first 12 months following closing, excluding transaction costs and other one-time effects. The company intends to use the net proceeds from the transaction for share repurchases.
General Mills plans to provide more information about the potential financial impact of the transaction when it reports its first-quarter results on Sept. 18, 2024.
JPMorgan acted as exclusive financial advisor to General Mills on the transaction, and Cleary, Gottlieb, Steen & Hamilton LLP served as legal advisor.
