General Mills is in talks to sell its North American yogurt business, including its flagship 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 explore interest from potential buyers such as rival snack food makers and private equity firms. They hope 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.
In March, General Mills reported better-than-expected third-quarter sales and profit driven by higher prices for its breakfast cereals, snack bars, and pet food products. General Mills has partnered with Yoplait since 1977 through a franchise agreement that gave it exclusive rights to market the brand in the U.S. However, the company has already divested from its European operations of Yoplait in 2021. The remaining U.S. and Canada yogurt operations generated a combined $1.4 billion in net sales for fiscal 2020, but face tough competition from market leaders like Chobani and Danone’s Dannon brand.
Over the past year, shares of General Mills have fallen about 20%, valuing the company at around $40 billion. Despite this decline, General Mills continues to focus on its core businesses while seeking opportunities to divest non-core assets like its North American yogurt business in order to streamline its strategy and improve profitability.