General Mills, a food conglomerate based in Golden Valley, is considering selling its North American yogurt business, including its popular Yoplait brand, in a deal that could be worth over $2 billion. The company is currently working with investment bank JPMorgan Chase to gauge interest from potential buyers, which could include rival snack food makers and private equity firms.
General Mills has been facing tough competition from market leaders like Chobani and Danone’s Dannon brand, and sees the remaining yogurt assets as non-core in its current strategy. In 2011, the company acquired a 51% stake worth $1.2 billion in Yoplait from private equity firm PAI Partners and French dairy cooperative Sodiaal. However, in 2021, General Mills sold the European operations of Yoplait to Sodiaal.
Despite this sale, General Mills still generated a combined $1.4 billion in net sales for fiscal 2020 from its U.S. and Canada yogurt operations. Shares of the company have fallen about 20% over the past year, valuing it at around $40 billion. However, in March of this year, General Mills topped market expectations for third-quarter sales and profit boosted by higher prices for its breakfast cereals, snack bars and pet food products.
The potential sale of General Mills’ North America yogurt business could provide a significant boost to the company’s bottom line if they are able to fetch a valuation close to their goal of nearly 10 times the unit’s 12-month earnings before interest, taxes depreciation and amortization of about $250 million.