US food giant General Mills has entered into an agreement to sell its 51% controlling interest in the European operations of yogurt maker Yoplait to Sodiaal, a leading French dairy cooperative, in exchange for full ownership of the Canadian Yoplait business.
The deal, which is expected to close by the end of the year, also involves a reduced royalty rate for General Mills’ use of the Yoplait and Liberté brands in the US and Canada.
Following completion of the transaction, the European entity Yoplait S.A.S. will operate yogurt businesses in France, the UK, and certain other markets, and manage a network of 28 franchisees manufacturing and distributing Yoplait branded products in more than 40 countries around the world. Net sales for the business that will be wholly owned by Sodiaal totalled $740m last year.
The deal will see General Mills acquire Sodiaal’s 49% ownership interest in Yoplait Canada Holding Co., making the business, which generates sales of $290m, a wholly-owned subsidiary of General Mills. Following completion, General Mills will wholly-own yogurt operations in the US and Canada that generated combined sales of $1.4bn last year and will be able to distribute Yoplait and Liberté branded products in both markets on a royalty-free basis.
General Mills, which also owns brands such as Old el Paso, Häagen-Dazs, and Nature Valley, had acquired the 51% stake in Yoplait from Sodiaal back in 2011 for a reported €800m.
The sale is part of the group’s new ‘Accelerate’ strategy that includes reshaping its product portfolio through acquisitions and sell-offs to boost profitability.
General Mills Chairman and Chief Executive Officer Jeff Harmening said: “This transaction improves our growth profile, enhances our margins, and creates value for our shareholders. Additionally, it increases our focus on the brand platforms that have the greatest growth potential.”
“Dana McNabb, Group President of General Mills’ Europe & Australia division, added: “This transaction allows us to accelerate our segment’s growth by increasing our focus on our advantaged global platforms, including Mexican food, super-premium ice cream, and snack bars.
“At the same time, we are pleased to be returning the European Yoplait business to the brand’s original creator and our trusted partner, Sodiaal. The General Mills team will work diligently alongside Sodiaal to ensure a smooth transition as this business enters its next chapter.”
