General Mills most likely Yoplait winner, says analyst

By Helen Glaberson

- Last updated on GMT

Related tags General mills Yoplait

Nestlé is unlikely to acquire Yoplait according to an industry analyst, who predicts that General Mills would be the eventual winner of the yoghurt business.

The joint owners recently rejected a €1.4bn bid for the yogurt-maker by French dairy giant Lactalis, saying it was too low.

According to recent press reports, the management is currently favouring an offer from Swiss food company Nestlé.


Yoplait emerged as an acquisition target this summer when private equity firm PAI Partners announced its intention to sell its 50 per cent stake in the French yoghurt Yoplait​business which it bought from French dairy cooperative Sodiaal in 2002.

The business is likely to draw interest from big international companies. Names that have been put forward include food giants such as Nestlé, General Mills, Asian food groups, private equity and groups.

Jon Cox, head of European food and beverage research at Kepler Capital Markets told he thought it was unlikely Nestlé would acquire the company.

He said, “I suspect eventually General Mills would be the winner.”

US food giant General Mills already forms part of Yoplait’s franchise model, distributing the brand in the US.

Cox said that as the company has US rights to the yoghurt brand, it doesn't want the Yoplait stake to fall into unfriendly hands.

However, Cox did stress that the recent “open invitation” ​to Nestlé by the Yoplait CEO increased the companies’ chances, “as does the rejection by Yoplait owners of the Lactalis bid”.

In terms of what Nestlé would gain from the acquisition, Cox said: “For Nestlé taking a 50 per cent stake say for €700m is not going to break the bank or make any difference to its earnings in the short term – however, it may be doing General Mills a favour given it has the US rights to Yoplait.

In addition Cox said that Nestlé has a joint venture with General Mills in cereals therefore the businesses are “quite close to each other”.

CEO preference

Yoplait CEO Lucien Fa said that Nestlé was the “ideal candidate” ​to acquire his firm, reported Swiss paper Le Matin Dimanche.

Fa noted that the Swiss group would match Yoplait “in terms of corporate profile”​, adding that it has the “money, structures and people”​ to support the yogurt maker’s expansion plans.
In the interview, Fa also said he wanted to move away from Yoplait’s franchise system and take greater control of operations in local markets. He added, “That means big investments, especially for China and India, our priorities”.

PAI Partners announced recently that it expects to agree on a sale of its 50-percent stake in Yoplait by the end of the first quarter.

Yoghurt growth prospects

Cox​said: “Yoghurt is an interesting business – although pretty much saturated in many continental countries and now more driven by perceived health benefits.”

The analyst said that “outside of Europe”​ there are strong growth prospects for yoghurt given per capita consumption remains low, “The trick now for yoghurt producers it to convince consumers that the product is nutritious, maybe has nutrition-plus qualities, and also isn’t a calorie bomb,” ​he added.

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