(By Balaseshan) General Mills Inc. (NYSE:GIS) said it agreed to buy Brazilian food maker Yoki Alimentos S.A. for an undisclosed sum in a step to expand its international operations.
General Mills said along with the Yoki acquisition, its fiscal 2013 plans include strong cash returns to shareholders. The addition of Yoki will more than double General Mills' annual sales in Latin America to nearly $1 billion.
Yoki is a privately-held, family-owned food company, which was established in 1960, headquartered in Sao Bernardo do Campo, Brazil.
General Mills currently expects the transaction to close during the first half of its 2013 fiscal year, which begins on May 28, after satisfaction of customary closing conditions.
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Brazil is an attractive consumer market as one of the biggest and fastest-growing economies in the world. A majority of its 200 million people now belong to the middle class and domestic consumption has become an important economic growth driver.
Yoki Alimentos' branded products Yoki and Kitano hold leading market positions in several attractive and growing food categories, including snacks (popcorn and snack nuts), convenient meals (side dishes, dry soups), basic foods (grains and beans), and seasonings.
Yoki employs more than 5,000 people, and has established a strong operating infrastructure in Brazil, including multiple manufacturing plants and national retail distribution. Yoki reported IFRS sales of Brazilian real 1.1 billion for the year ended December 2011.
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In recent years, General Mills' international operations have been growing rapidly. Fiscal 2012 international segment net sales are expected to exceed $4 billion, including sales from the Yoplait International yogurt business acquired July 1, 2011.
GIS is trading up 0.26% at $38.69 on Thursday. The stock has been trading between $34.64 and $41.06 for the past 52 weeks.