General Mills is considering selling its North American yogurt business, including its popular Yoplait brand, in a deal worth more than $2 billion. The food conglomerate, based in Golden Valley, is working with investment bank JPMorgan Chase to gauge interest from potential buyers such as rival snack food makers and private equity firms.
General Mills has seen its shares fall about 20% over the past year, valuing the company at around $40 billion. In March, the company topped market expectations for third-quarter sales and profit due to higher prices for breakfast cereals, snack bars, and pet food products. General Mills partnered with Yoplait in 1977 through a franchise agreement that gave the company exclusive rights to market the brand in the US.
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. Sodiaal retained the remaining stake. In 2021, General Mills sold the European operations of Yoplait to Sodiaal. The company’s U.S. and Canada yogurt operations generated a combined $1.4 billion in net sales for fiscal 2020.
However, having already shed the European unit of Yoplait, General Mills sees the remaining yogurt assets as non-core in its current strategy as it faces tough competition from market leaders like Chobani and Danone’s Dannon brand. As such, they are hoping to fetch a valuation for their yogurt portfolio of nearly ten times their unit’s twelve-month earnings before interest taxes depreciation amortization of approximately $250 million