Manufacturer and marketer of branded consumer foods General Mills, Inc. (GIS) has revealed a plan to divest its European dough businesses to ready-to-bake dough solutions provider Cérélia. The terms of the deal, which is likely to close by the end of Fiscal Year 2022, have not been disclosed so far.
Following the news, shares of the company declined marginally to close at $63.30 in Wednesday’s extended trading session.
Implications of the Deal
The proposed sale includes General Mills’ branded and private label dough businesses in Germany, the UK, and Ireland, including the Knack & Back and Jus-Rol brands.
The sale is in line with the company’s General Mills Accelerate strategy, which focuses on areas where the company intends to grow across geographies.
Recently, Jefferies analyst Robert Dickerson reiterated a Hold rating on the stock. The analyst, however, raised the price target from $64 to $65, which implies upside potential of 2.7% from current levels.
Consensus among analysts is a Hold based on 3 Buys, 5 Holds and 1 Sell. The average General Mills price target of $65 implies upside potential of 2.7% from current levels. Shares have gained 5.5% over the past year.