NEW YORK -- French food group Bonduelle SCA is in discussions to team up with Centerview Partners in a bid to acquire General Mills Inc.'s Green Giant frozen and canned vegetable business, according to people familiar with the matter.
Bonduelle shares rose 3 percent in Paris on Tuesday, as analysts said a deal, if it went through, would reinforce the French group's footprint in North America, a region where it generates 23 percent of its 1.9 billion euros in annual sales. General Mills shares rose 1 percent in early trading in New York.
Joining with the private equity arm of investment bank Centerview would give Bonduelle, which has a market capitalization of 796 million euros ($861 million), more capital and additional expertise in its pursuit of Green Giant.
The potential consortium of Bonduelle and Centerview would compete against other bidders, and there is no certainty that Bonduelle's offer would prevail, the sources said on Monday.
They asked not to be identified because details of the sale process are confidential. General Mills and Centerview declined to comment.
A Bonduelle spokeswoman on Tuesday declined to comment on "a rumor that has been doing the rounds for a long time".
Minneapolis-based General Mills hired investment bank Rothschild to explore a sale of Green Giant, Reuters reported in March. Green Giant has approximately $700 million in annual revenue, sources told Reuters at the time.
Green Giant, whose mascot is the Jolly Green Giant, makes more than 160 different products, including steamed and canned vegetables, corn on the cob, chips and hummus.
Green Giant has struggled as consumer preferences shift away from sauced varieties towards more plain vegetables, Jeff Harmening, chief operating officer at General Mills, told investors and analysts at the company's fiscal 2016 investor day last week.
Based outside Lille in northeast France, Bonduelle owns manufacturing facilities in Canada that produce canned goods for Green Giant. Bonduelle Chief Executive Christophe Bonduelle told French newspaper Les Echos in 2010 the company would be interested in acquiring Green Giant but not at any cost.
"This acquisition would make sense because Bonduelle is already the supplier of the U.S. group in Canada," said Florent Thy-Tine, analyst at Louis Capital Markets. "It would fit with Bonduelle's strategy to reinforce its footprint in the United states and buy a well-known brand."
Green Giant would not be Bonduelle's first North American acquisition. It has purchased certain vegetable operations from Allens, a U.S.-based canned and frozen vegetable company, and Canadian vegetable companies Omstead Foods, Family Tradition Foods and Aliments Carrière.
Additional reporting by Olivia Oran in New York, Noelle Mennella and Dominique Vidalon in Paris.