General Mills to buy Brazil’s Yoki for $1.16bn

US food processing company General Mills has agreed to acquire Brazilian food company Yoki for BRL2bn ($1.16bn), marking its return to Latin America.

Quoting unnamed sources familiar with the deal, local newspaper O Estado de S. Paulo reported that following the acquisition, General Mills may seek to establish new food plants in the country.

General Mills owned Frescarini pasta factory and snack company Forno de Minas in Brazil, but it lost the pasta factory to fire in 2007 and sold Forno de Minas in 2009, marking its partial exit from the country.

Since then, the US company has only been selling imported products, such as cereal bars and Häagen-Dazs ice cream in Brazil.

Yoki, based in Sao Bernardo do Campo, is a family-run company and has nine plants across six states in the country.

It offers food products such as cereals, popcorn, juice mixes, snacks, ready mixes, ingredients, natural and industrialised condiments, soups, corn and manioc flours, herbs, seasonings, spices, and peppers, among others.

Brazil has grown as a lucrative market for food companies such as General Mills, especially as the country has seen the rise of a middle class over the last decade.

This deal marks the second acquisition for General Mills over the past year. In May 2011, the company announced its plan to acquire a 51% controlling stake in French dairy group Yoplait from private equity fund PAI Partners and dairy cooperative Sodiaal for $1.2bn, and the acquisition was completed in July.

The company reported 8.9% increase in net sales to $3.85bn for the first quarter of fiscal 2012, helped by the Yoplait acquisition.

General Mills, headquartered in Minnesota, US, is one of the world’s leading food companies, operating in more than 100 countries. Its consumer brands include Cheerios, Häagen-Dazs, Nature Valley, Yoplait, Betty Crocker, Pillsbury, Green Giant, Progresso and Old El Paso.

 

Caption: Brazil has grown as a lucrative market for food companies such as General Mills in the last decade. Photo: General Mills