General Mills will sell its North America yoghurt business to French dairy firms Groupe Lactalis and Sodiaal in a $2.1 billion (€1.9 billion) deal, the Cheerios maker said in statement.
Lactalis will acquire the US business and Sodiaal will buy the Canadian unit, the company said.
Reuters reported in April that General Mills was working with investment bank JPMorgan Chase to attract interest from potential buyers for the business, which houses brands such as Yoplait and Liberté.
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General Mills chair and chief executive officer, Jeff Harmening, stated, “Upon completion of these divestitures, we will have turned over nearly 30% of our net sales base since fiscal 2018.
“By efficiently managing our portfolio and sharpening our focus on our global platforms and local gem brands that have stronger growth prospects and more attractive margins, we will be in a better position to drive top-tier shareholder returns over the long term.”
Yoplait is facing tough competition in the US from privately held yoghurt brand Chobani, as well as Danone's Dannon brand.
The North American Yogurt business contributed about $1.5 billion (€1.4 billion) to General Mills’ fiscal 2024 net sales.
Packaged food makers are divesting units not delivering high growth to rein in costs and focus on expanding their core brands as they respond to consumers seeking cheaper alternatives.
General Mills
In June of this year, General Mills posted a bigger-than-expected drop in quarterly sales as cash-strapped consumers cut back on its higher-margin products and turned to cheaper alternatives.
Full-year net sales declined 1% to $19.9 billion (€18.6 billion), while operating profit remained flat at $3.4 billion (€3.2 billion).
The company's quarterly net sales fell to $4.71 billion (€4.4 billion) from $5.03 billion (€4.7 billion) a year ago. Analysts, on average, had expected sales of $4.85 billion (€4.5 billion), according to LSEG data.
In July, the company announced the appointment of Asheesh Saksena as its next chief strategy and growth officer. Saksena joined the company in August and reports to chief executive and chairperson, Jeff Harmening.
News by Reuters, additional reporting by ESM.
