General Mills sells yogurt business to Lactalis and Sodiaal for $2.1B

General Mills has announced the sale of its North American yogurt business to French dairy companies Groupe Lactalis and Sodiaal for $2.1 billion. This strategic move is aimed at allowing General Mills to concentrate on its more profitable brands, as the yogurt sector has been facing intense competition, particularly from brands like Chobani and Danone's Dannon. The U.S. operations will be acquired by Lactalis, while Sodiaal will take over the Canadian segment. The decision to divest comes as part of a broader trend among packaged food companies to streamline operations and focus on high-growth areas. General Mills' yogurt business, which includes well-known brands such as Yoplait and Liberté, generated approximately $1.5 billion in net sales for the fiscal year 2024. However, the company has recognized that the yogurt market is not delivering the growth it once did, prompting the need for this sale. The transaction is expected to close in 2025, and it is projected to have a 3% dilutive effect on General Mills' adjusted earnings per share in the first year following the closure. This divestiture follows a history of acquisitions and sales in the yogurt sector, including General Mills' previous purchase of a majority stake in Yoplait in 2011 and the sale of its European operations to Sodiaal in 2021. Overall, this sale reflects General Mills' commitment to enhancing its focus on core brands with stronger margins, as it navigates a competitive landscape and responds to changing consumer preferences for more affordable options.