Lactalis and Sodiaal to acquire General Mills’ $2.1bn North American yogurt business

Dairy major Lactalis is set to acquire General Mills’ yogurt business in the US while French dairy co-operative Sodiaal will take over the firm’s Canadian operations.

The transactions, valued at around $2.1bn in total, are set to close in calendar 2025 subject to regulatory approvals and other closing conditions. Collectively, the North American yogurt business contributed around $1.5bn to General Mills’ fiscal 2024 net sales.

In the US, Lactalis’ acquisition encompasses yogurt brands Mountain High and :ratio as well as – under license – Yoplait, Go-Gurt, Oui, Liberté, and others. The deal will expand Lactalis’ position in the US yogurt market, where the company owns brands such as Stonyfield Organic, siggi’s, Brown Cow and Green Mountain Creamery.

Sodiaal – which acquired General Mills’ Yoplait European yogurt business in 2021 – will acquire Yoplait and Liberté in Canada, with Lactalis the operating rights holder for the two brands in the US.

The transaction – which includes a production site located in Saint-Hyacinthe in Quebec - strengthens Sodiaal’s FMCG division and offers ‘additional lever for value-creation for the co-operative’s farmers’, said the co-op. In addition, Canada’s CAD1.9bn fresh dairy market offers ‘a strong growth potential’ for Yoplait in the region, Sodiaal said.

The deal fits into the French co-op’s expansion strategy, which involves entering emerging market segments and strengthening brand awareness and global market presence.

“Today’s announcement represents another significant step forward for General Mills in advancing our Accelerate strategy and our portfolio reshaping ambitions,” said General Mills Chairman and Chief Executive Officer Jeff Harmening. “Upon completion of these divestitures, we will have turned over nearly 30 percent of our net sales base since fiscal 2018. By efficiently managing our portfolio and sharpening our focus on our global platforms and local gem brands that have stronger growth prospects and more attractive margins, we will be in a better position to drive top-tier shareholder returns over the long term.”

“We would also like to take this time to thank our North American yogurt team members for their significant contributions,” Harmening continued. “In Lactalis and Sodiaal, we believe we’ve found the right homes for these businesses, with dairy-focused owners who are well equipped to drive success for our people and growth for these brands into the future.”

General Mills anticipates the combined transactions will be approximately 3% dilutive to adjusted earnings per share in the first 12 months after the close, excluding transaction costs and other one-time impacts. The company expects to use the net proceeds from the transactions for share repurchases.

General Mills will provide additional details about the potential financial impact of the transactions when it reports first-quarter results on September 18, 2024.