US food group General Mills has reshaped its portfolio by selling its European holding in yoghurt brand Yoplait to French dairy co-operative Sodiaal.
The group revealed today it entered an agreement with Sodiaal to sell back its 51% controlling stake to the business, in exchange for full ownership of the Canadain Yoplait business and a right to distribute the Yoplait and Liberté brands across all of North America on a royalty-free basis.
General Mills picked up the 51% stake in Yoplait from Sodiaal back in 2011, for a reported €800m.
Once the proposed deal completes later this year, Sodiaal will operate the Yoplait yoghurt businesses in the UK and France, as well as 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 European Yoplait business totalled $740m (£537m) in 2020, while the Canadian arm generated revenues of $290m (£210m). General Mills will own yoghurt operations in the US and Canada with a combined turnover of $1.4bn (£1bn) when the deal is finalised.
The sale comes after General Mills, which owns the likes of Old el Paso, Cheerios and Häagen-Dazs, outlined a new ‘Accelerate’ strategy at last month’s CAGNY conference in New York. The new direction included reshaping its portfolio with acquisitions and sell-offs.
CEO Jeff Harmening said today the deal with Sodiaal was another step toward advancing the ‘Accelerate’ strategy to drive profitable growth for the long term.
“This transaction improves our growth profile, enhances our margins, and creates value for our shareholders,” he added. “Additionally, it increases our focus on the brand platforms that have the greatest growth potential.”
Dana McNabb, group president of General Mills’ European and Australia division, said the transaction allowed the company to accelerate growth in the region by increasing focus on the Mexican food, premium ice cream and snack bars categories.
“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,” she added.
Yoplait had been a “well-loved brand that has been a respected part of the General Mills family for a long time”, said its UK & Ireland MD Ben Pearman.
“We are confident in Sodiaal’s expertise and ability to provide the resources needed to help Yoplait flourish and grow as it enters the next chapter in its brand story.”
The proposed deal is expected to close by the end of this year, subject to various regulatory conditions.