GENERAL Mills is set to buy a 50 per cent stake in French yoghurt maker Yoplait from PAI Partners for roughly €800m (£496m).
The deal would give Yoplait, the world’s second-largest yoghurt maker after Danone, a total value of €1.6bn, some four times the value of the business when PAI invested in 2002.
French dairy cooperative Sodiaal will retain the remaining 50 per cent of the business. A spokesperson for Sodiaal said PAI would make an announcement regarding its stake in Yoplait by this morning.
“The transaction leaves everybody happy, and Sodiaal would feel there was a partner that was really committed to taking the business forward and had the means to do so,” said a source close to the situation.
Another source familiar with the deal said both Mexico’s Groupo Lala and Nestle were in a good position to win the bid, but General Mills’ strong financials helped win the day.
“[General Mills] could pay for it off their balance sheet,” said a person close to the deal. “No mess or fuss.”
A deal with General Mills, which also makes Cheerios cereals and Haagen-Dazs ice cream, will resolve a conflict with Yoplait parent group Sodima, which told the US firm last year it wanted to terminate their long-running licensing agreement.
General Mills, whose brands include Pillsbury and Betty Crocker, has distributed Yoplait yogurt in the United States for more than 30 years, analysts said.
The acquisition of the Yoplait stake protects General Mills’ distribution rights in the US and eliminates the risk of a competitor edging in on that business, analysts said.
“The price is a bit higher than expected, but settles an ongoing question mark,” said Janney Capital Markets analyst Jonathan Feeney.
City A.M. Reporter