General Mills to Grow Brazil Operations with Yoki Deal
General Mills announced Thursday that it has agreed to buy Brazil-based food company Yoki Alimentos, S.A., for about $859 million.
The Golden Valley-based food manufacturer said it expects to close the deal during the first half of its 2013 fiscal year, which begins Monday. Rumors about such an acquisition surfaced in media reports earlier this year.
Yoki is a privately-held company that produces packaged foods—including snacks, dry soups, juices, seasonings, and microwave popcorn—under the Yoki and Kitano brand names. It has several manufacturing facilities and distribution centers across Brazil and employs more than 5,000. Its 2011 sales totaled approximately $540 million.
General Mills said that the acquisition will more than double its annual sales in Latin America, boosting them to nearly $1 billion. It will also give the food giant the opportunity to own production facilities in Brazil. The company currently sells imported packaged foods in Brazil, including Nature Valley cereal bars and HÃ¤agen-Dazs ice cream, but it does not have any production facilities there.
“Yoki adds key capabilities and geographic scale that will accelerate our growth in Brazil,” Chris O'Leary, General Mills’ executive vice president and chief operating officer for international operations, said in a statement. “We plan to focus on building the strong Yoki and Kitano product portfolio, expanding our current HÃ¤agen-Dazs and Nature Valley businesses in Brazil, and introducing additional General Mills brands in this important market over time.”
The announcement about the acquisition comes less than a week after General Mills said that it plans to cut 850 jobs across the company in order to lower costs as it faces rising commodity prices. Roughly half of the affected jobs are in Minnesota.
Meanwhile, the company’s international operations have been growing recently; General Mills expects its international sales to surpass $4 billion in its 2012 fiscal year, up 38 percent from $2.9 billion in fiscal 2011. The company said that one of the factors contributing to the rise in international sales is its July acquisition of a 51 percent stake in France-based yogurt manufacturer Yoplait, S.A.S. General Mills said in September that it expected the Yoplait deal to add $1.2 billion to its annual revenue—marking a 41 percent boost in sales for the company’s international division.
General Mills is the eighth-largest public company in Minnesota based on revenue, which totaled $14.8 billion for the fiscal year that ended in May 2011.