General Mills is selling its European Yoplait business in exchange for full control of the same brand in Canada, a move that concentrates the company's yogurt enterprise in North America.
The company said Tuesday that it will sell its 51% controlling interest in Yoplait S.A.S., the brand's European unit, to French dairy cooperative Sodiaal. In return, the French firm will sell General Mills its 49% stake in Yoplait Canada Holding Co.
The deal is expected to close in late 2021, at which time General Mills will fully own Yoplait in Canada.
The Golden Valley-based food maker already has full ownership of the U.S. Yoplait business.
As part of the deal, General Mills will no longer pay royalties to distribute Yoplait and Liberté branded products in the U.S. or Canada.
Yogurt has been a difficult business for General Mills in the last decade as new competition — first from Greek yogurt and then dairy-alternative yogurts — diluted its market share and profits. While France is one of its largest international markets, the company has had some hiccups in its dairy supply and customer relationships there in recent years.
This deal reduces General Mills' geographic footprint in yogurt, a move executives believe will allow it to focus on its strongest products.
"This transaction improves our growth profile, enhances our margins, and creates value for our shareholders," Jeff Harmening, chief executive of General Mills, said in a statement. "Additionally, it increases our focus on the brand platforms that have the greatest growth potential."
General Mills bought controlling interest in Yoplait S.A.S. in 2011, operating the yogurt business in France, the United Kingdom and select other markets, while Sodiaal remained minority owner. The brand's European unit generated $740 million in sales in fiscal 2020.
Yoplait Canada posted net sales of $290 million while U.S. net sales amounted to $1.1 billion in fiscal 2020.
This transaction frees up General Mills' resources to focus on its products that perform best in Europe, like Old El Paso, Häagen-Dazs ice cream and snack bars, said Dana McNabb, president of General Mills' Europe & Australia segment.
Kristen Leigh Painter • 612-673-4767