General Mills has entered into definitive agreements to acquire a 51 percent controlling interest in French yogurt maker Yoplait and a 50 percent stake in a related entity that holds the global Yoplait brands.
General Mills, which has held the license for the Yoplait brand in North America since 1977, won a bidding race with an offer of €810m (about $1.15bn) in March, after private equity firm PAI had put its 50 percent share in the company up for auction last summer – attracting bids from major food industry players, including Nestlé, Bel, Lactalis and The Bright Food Company. French dairy cooperative Sodiaal will hold the remaining ownership stakes in both entities.
Completion of the transaction is subject to regulatory approval, but is expected in the first quarter of General Mills’ 2012 fiscal year, which begins on May 30.
The business will be run by a supervisory board with representation from both General Mills and Sodiaal, with General Mills’ Chris O’Leary, executive vice president and COO – International, taking on management oversight of the business.
Sodiaal International president Gérard Budin said in a joint statement with O’Leary: “We see tremendous opportunities to work together to become a major competitive force in the development of global yogurt markets.”
They added that consumer demand for yogurt is growing due to increased interest in foods for “nutrition, convenience, flavor variety and value.” They also highlighted that there is room for growth in many international markets where yogurt consumption is still low.
Yoplait is the world’s second largest yogurt brand after global market leader Danone.
End of arbitration
Completion of the deal with Sodiaal will also mark the end of an ongoing arbitration dispute in the United States, General Mills said.
Late last year, Sodiaal threatened to terminate General Mills’ US license for Yoplait in 2012, due to disagreement about the fee. General Mills had said that renegotiation was not permissible. The two companies have now agreed to formally withdraw from arbitration on completion of the deal, at which time General Mills will continue to market Yoplait in the US under the license agreement.