General Mills is considering selling its North America yogurt business, including the popular Yoplait brand, in a deal that could be worth more than $2 billion. The Golden Valley-based food conglomerate is working with investment bank JPMorgan Chase to gauge interest from potential buyers, which could include rival snack food makers and private equity firms.
The company hopes to fetch a valuation for the yogurt portfolio of nearly 10 times the unit’s 12-month earnings before interest, taxes, depreciation, and amortization of about $250 million. Shares of General Mills have fallen about 20% over the past year, valuing the company at around $40 billion. However, in March, 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.
General Mills partnered with Yoplait in 1977 through a franchise agreement, giving the company exclusive rights to market the brand in the U.S. 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
