General Mills is reportedly examining the possibility of divesting its yoghurt business in North America.
Reuters has reported that the American company has enlisted the services of investment banking firm JPMorgan Chase to assist in identifying prospective purchasers for this division.
The producer of Nature Valley snack bars is aiming to have the portfolio valued at nearly ten times the asset’s annual EBITDA, which is approximately $250m, according to unnamed sources familiar with the matter.
The yoghurt product line of General Mills includes well-known brands such as Yoplait, Liberté, and Ratio Food.
At the time this article was prepared, the company had not responded to a request for comment from Just Food.
In a significant move in 2021, the company headquartered in Minneapolis sold a 51% controlling interest in its European yoghurt operations to its co-shareholder, Sodiaal, a French dairy cooperative.
Through this transaction, General Mills took full ownership of Yoplait in Canada and secured a reduced royalty rate for the use of the Yoplait and Liberté brands throughout North America.
The company, also known for its Old El Paso meal kits, originally acquired its stake in Yoplait in 2011. It held 51% of Yoplait SAS and 50% of Yoplait Marques SNC, another entity that owns Yoplait and its associated trademarks.
Sodiaal, which shares ownership in both entities, provides milk for the Yoplait brand.
For the nine months ending 25 February, General Mills reported a 1% increase in total net sales to $15.1bn, with operating profits also rising by the same margin to $2.6bn.
In the third quarter, the group saw a 1% decrease in total net sales, amounting to $5.1bn. However, total operating profits surged by 25% to $911m.
The net sales in its North American retail sector remained constant year-on-year at $9.6m, whereas the foodservice sector in the region experienced a 3% increase.
Operating profits in the North American retail market stayed level over the nine-month period but saw a 9% increase in the foodservice sector. In the third quarter, they fell by 4% in retail and 1% in foodservice.