General Mills is set to complete the sale of its US yogurt business to Lactalis by the end of June 2025 after the US Department of Justice’s antitrust division gave the deal the go-ahead this week.
The transaction – which would solidify Lactalis’ position in the yogurt market – is part of a $2.1bn agreement that General Mills struck with Sodiaal and Lactalis for the sale of its entire North American yogurt business; with Sodiaal taking over the Canadian operations, and Lactalis those in the US.
In January 2025, General Mills completed the first part of the divestiture, netting $95.9m in pre-tax gains from offloading the Canadian operations of brands including Yoplait and Liberté to Sodiaal. The transaction reduced General Mills’ net sales by 1% group-wide and in double-digit terms in Canada.
The sale of the US yogurt business is set to deliver significant windfall for the Häagen-Dazs maker – potentially to the tune of $2bn, based on the agreement’s valuation.
Described as an ‘elephant deal’ by analysts when it was first announced in September 2024, General Mills’ North American yogurt divestiture is likely to catapult Sodiaal into a more commanding position among dairy’s richest companies while strengthening Lactalis’ hand on North America’s yogurt scene.
In the US, Lactalis owns brands such as Stonyfield Organic, siggi’s, Brown Cow, Lactaid, and Green Mountain Creamery.
Lactalis: Getting bigger and bigger
Lactalis is already the largest dairy business globally. The French multinational generated more than €30bn ($34.1bn) in revenue in the last financial year, an improvement of 2.8% over FY2023. The company also reduced its debt load from €6.45bn to €5.03bn in the period and recorded a 4.3% increase in operating income.
Pet food major
General Mills has made five strategic acquisitions in the pet food space in the past seven years. Most recently, the company acquired Whitebridge Pet Brands’ North American premium cat feeding and pet treating business from NXMH, for a purchase price of $1bn. General Mills also bought Blue Buffalo (2018), Nudges, Top Chews, and True Chews (2021), Fera Pets (2023) and Edgard & Cooper (Q4 2024).
Pet food is among the company’s five key segments – alongside snacking, cereal, ice cream and meals – that generate the most sales for the group. As part of its Accelerate strategy, the firm has increased spending in media and product innovation and has sought to scale up through strategic M&As and through investments in emerging platforms.
To cement its dominance, Lactalis has continued to make strategic acquisitions globally; most recently purchasing South African coffee creamer brand Cremora and Portuguese cheese maker Queijos Tavares.
And the eye-watering General Mills deal in the US is unlikely to be Lactalis’ last major acquisition in 2025.
The global dairy major is considering the purchase of Fonterra’s NZ$4.9bn ($2.82bn) consumer and associated businesses in order to strengthen its presence in Asia and Oceania.
In a bid to move ahead of other interested parties, which include regional cheese major Bega, Lactalis started an informal merger review process with the Australian competition regulator (ACCC) to ensure a potential deal wouldn’t raise antitrust concerns. Fonterra’s for-sale division comprises significant assets in Australia; ACCC’s decision was due in late June, but the timeline has been delayed as the regulator assesses additional information from the parties involved.
Fonterra has remained coy on who is its preferred buyer, having adopted a dual-track process with both a trade sale and an IPO under consideration.
The co-op’s CEO Miles Hurrell indicated during the company’s recent investor update that the sale remains ‘on track’ and a farmer shareholder vote is set to be scheduled to determine the course of the transaction.
TLDR
In September 2024, General Mills agreed to sell its North American yogurt business to Sodiaal and Lactalis in a transaction valued at $2.1bn.
General Mills sold its Canadian operations to Sodiaal in January 2025, netting $96m in divestiture gains.
Having received the go-ahead from the DoJ in early June, the Haagen-Dazs maker is set to complete the divestment of its US yogurt business to Lactalis - with the potential to net more than $2bn from the transaction.
The deal is expected to close by the end of June 2025.