July 26, 2010

PAI plans to sell Yoplait stake

The private equity owner of Yoplait, PAI Partners is considering selling its 50% share in the French dairy company, according to reports.

PAI, which also owns stakes in dairy ingredients supplier Chr. Hansen and snack firm United Biscuits, bought a 50% holding in Yoplait back in June 2002 from the French dairy cooperative Sodiaal. The co-op retained the remaining share in the business.

At the time, PAI said it intended to build the strength and global presence of Yoplait, investing in product innovation and branding.

In partnership with Sodiaal, PAI succeeded in growing the global turnover of the business from about EUR2 billion (US$2.58 billion) in 2002 to over EUR3.5 billion (US$4.52 billion) last year.

Yoplait is now the second largest brand of fresh dairy products in France and commands a considerable presence in overseas markets. It has a presence in almost 50 countries and North America accounts for almost 50% of its gross turnover.

The company is likely to attract interest from foreign dairy rivals like Nestle, General Mills, and Arla Foods and could be auctioned off for as much as EUR1.2 billion (US$1.55 billion).

Yoplait is not the only business PAI could be putting up for sale. According to reports, United Biscuits, which is owned jointly by PAI and fellow private equity group Blackstone, is also being put up for sale.

Owners of food assets consider that now is a good time to sell because food is seen as a safe bet in uncertain economic times.