General Mills said Friday that it has entered into exclusive negotiations to buy a majority stake in French yogurt company Yoplait.
The binding offer with PAI Partner and Sodiaal, the owners of Yoplait S.A.S., would beat out rivals bidding for the company.
General Mills' offer includes a 50 percent interest and a controlling role in the company, the food company said. It said that discussions are in progress, and that it is also initiating talks with French works councils.
The purchase would value Yoplait at $2.3 billion, according to the French dairy cooperative and a private equity firm that owns Yoplait. The private equity firm is selling its stake. Last year, the dairy cooperative said it wanted to end General Mills' licensing agreement for Yoplait.
"General Mills has really developed the Yoplait and grown that brand to be a leading player in the domestic market," said Erin Swanson, an analyst with Morningstar. "The owner of the rights felt General Mills wasn't paying a high enough licensing fee."
Yoplait officials in France said they won't comment on the negotiations until they are finished talking to the works council and other concerned parties, which they predicted would be the middle of next week.
Under the proposed transaction, General Mills will team up with Sodiaal in expanding the Yoplait brand and businesses in France, Europe and around the world.
General Mills, based in Minneapolis, has licensed the Yoplait brand since 1977, and is Yoplait's largest licensee.
The seven bidders for the stake in Yoplait included China's Bright Foods, Switzerland's Nestle SA, which has a joint venture in yogurt, Mexico's Grupo Lala Axa Private Equity and French dairy company Groupe Lactalis.
(Copyright 2011 by The Associated Press. All Rights Reserved.)
(MPR reporter Martin Moylan contributed to this report.)