The deal includes the assumption of about 200m reais ($98m) of debt. It is expected to close in the first half of fiscal 2013, which starts on May 28, 2012.
Yoki reported sales of 1.1bn reais ($540m) for the year ended December 2011, and its Yoki and Kitano branded products hold prominent positions in Brazil in popcorn and snack nuts, side dishes and dry soups, seasonings, and basic foods like grains and beans, General Mills said.
“The addition of Yoki will more than double General Mills’ annual sales in Latin America to nearly US$1bn,” the company said, adding that it expects international sales to exceed $4bn in fiscal 2012. General Mills’ total net sales were $14.9bn in fiscal 2011, with $2.9bn from its consolidated international businesses.
“International expansion is a key growth strategy for General Mills,” company spokesperson Kirstie Foster told this publication. “…Brazil is an exciting market for General Mills, and we have been seeking the right opportunity to accelerate our growth in this important market. As one of the biggest and fastest-growing economies in the world, Brazil is an attractive consumer market.”
She said that the deal would “strengthen its position with Brazil’s expanding middle class.”
The São Paolo-based company has an established infrastructure in Brazil, including several manufacturing plants and nationwide retail distribution. It employs more than 5,000 people, and Foster said that General Mills would seek to retain Yoki staff, including those in key management roles.
General Mills’ executive vice president and chief operating officer, International Chris O’Leary said in a statement: “Yoki adds key capabilities and geographic scale that will accelerate our growth in Brazil. We plan to focus on building the strong Yoki and Kitano product portfolio, expanding our current Häagen-Dazs and Nature Valley businesses in Brazil, and introducing additional General Mills brands in this important market over time.”
The acquisition announcement comes on the heels of General Mills’ decision to cut 850 jobs globally as part of a cost reduction strategy, as it has struggled with high ingredient costs. The firm said that about half of those positions would be lost in Minneapolis, where it has its corporate headquarters, with the rest spread across its global business.