General Mills Offloads US, Canadian Yogurt Divisions In $2.1B Deal Amid Competition And Market Challenges: Details
Portfolio Pulse from Nabaparna Bhattacharya
General Mills is selling its North American yogurt business to Lactalis and Sodiaal for $2.1 billion, citing competition and market challenges. The deal is expected to be completed by 2025 and may dilute earnings. Proceeds will be used for share repurchases.
September 12, 2024 | 3:23 pm
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NEUTRAL IMPACT
First Trust Nasdaq Food & Beverage ETF, which includes General Mills, might experience minor effects from GIS's yogurt business sale and its impact on earnings.
FTXG includes General Mills, so the sale of GIS's yogurt business and its earnings impact could slightly affect the ETF. The diversified nature of the ETF limits the overall impact.
CONFIDENCE 70
IMPORTANCE 50
RELEVANCE 50
NEUTRAL IMPACT
Invesco Food & Beverage ETF, which includes General Mills, may see a slight impact due to the sale of GIS's yogurt business, affecting GIS's earnings.
PBJ holds General Mills, so changes in GIS's business strategy and earnings could affect the ETF. However, the impact is likely limited given the ETF's diversified holdings.
CONFIDENCE 70
IMPORTANCE 50
RELEVANCE 50
NEGATIVE IMPACT
General Mills is selling its North American yogurt business for $2.1 billion, which may dilute earnings by 3% in the first year post-close. The company plans to use proceeds for share repurchases.
The sale of the yogurt business is a significant strategic move for General Mills, indicating a shift in focus due to competitive pressures. The expected dilution in earnings suggests a short-term negative impact on the stock price.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100