General Mills (GIS.N), will sell its North America yogurt business to French dairy firms Groupe Lactalis and Sodiaal in a $2.1 billion deal, the Cheerios maker said on Thursday.
Lactalis will acquire the U.S. business and Sodiaal will buy the Canadian unit, the company said.
Reuters reported in April that General Mills was working with investment bank JPMorgan Chase (JPM.N), to attract interest from potential buyers for the business, which houses brands such as Yoplait and Liberté.
Packaged food makers are divesting units not delivering high growth to keep a tight leash on costs while expanding their core brands as they respond to consumers seeking cheaper alternatives.
The divestiture will help sharpen focus on key brands that have stronger margins, Chief Executive Officer Jeff Harmening said in a statement.
Yoplait is facing tough competition in the U.S. from privately held yogurt brand Chobani, as well as Danone’s (DANO.PA), Dannon brand.
The North American yogurt business contributed about $1.5 billion to General Mills’ fiscal 2024 net sales.
The Golden Valley, Minnesota-based company expects the deals to close in 2025, and will dilute adjusted earnings per share by about 3% in the first 12 months after the close.
Bloomberg News earlier on Thursday reported that General Mills was in talks to sell the North America yogurt operations to Groupe Lactalis and Sodiaal.
Yoplait was started by a group of French dairy farmers in 1964. It partnered with General Mills in 1977 through a franchise agreement giving the maker of Bisquick pancake mix exclusive rights to market the brand in the U.S.
Then 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, which retained the remaining stake.
In 2021, General Mills sold the European operations of Yoplait to Sodiaal.
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