General Mills Inc. is selling Green Giant & Le Sueur in an effort to build its growing portfolio, according to The Denver Post Business. B&G Foods Inc. will be acquiring the said frozen and canned vegetable business division for $765 million.
General Mills reportedly will focus on items that make a better appeal to its consumers. The company aims to address Americans' growing needs for fresher, less-canned foods.
Green Giant and Le Sueur businesses, which covers the United States, Canada and other select markets, reportedly had net sales of about $585 million for the 2015 fiscal which ended in May 31, with total sales amounting to $17.6 billion, MenaFN.com reported.
If the deal supports General Mills' strategic business planning, what's in it for the B&G?
"The Green Giant acquisition provides us with a great opportunity for growth in a large industry segment," the company said, as reported by the Bulletin Leader.
B&G said that the deal, which is subject to regulatory approval, is expected to close in the fourth quarter of 2015. It has been reported that the company is expecting their latest acquisition will generate earnings instantaneously.
The report additionally stated that B&G made note of the net sales the acquired brands would generate.
The company reported after a six to twelve months of transition, they would generate about $550 million, with adjusted EBITDA of nearly $95 million to $100 million, and earnings per share of $0.60 on a yearly basis.
General Mills, as per the agreement, will continue to operate the Green Giant Business in Europe and other export markets under license from B&G Foods.
General Mills operates in more than 100 countries with brands such as Cheerios breakfast cereal, Pillsbury, Yoplait yogurt, Gold Medal baking products and Häagen-Dazs ice cream.
B&G owns more than 40 brands that include Molly McButter, Pirate's Booty, Cream of Wheat, Devonsheer, Emeril's and JJ Flats.
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