Snack food company B&G Foods Inc. Parsippany, N.J., which, in addition to snacks makes Cream of Wheat cereal, is said to be in late-stage discussions to purchase the Green Giant frozen and canned vegetable business from General Mills, unnamed sources familiar with the matter reported last week. If B&G wins in its bid for Green Giant, the deal would expand B&G's lineup beyond the shelf-stable snack food into the frozen food aisle. There is no certainty a deal will be reached, the sources said.
Private equity firms Cerberus Capital Management LP and Platinum Equity LLC, as well as French food group Bonduelle SCA reportedly also have made offers for Green Giant, and General Mills could decide to negotiate with them if its discussions with B&G are unsuccessful, the sources add.
Green Giant is expected to be valued at between $600 and $800 million, reports Reuters. General Mills has never come out and stated it wanted to sell its $700-million Green Giant business, but sevearl news reports earlier this year indicated it hired an investment banking firm to shop the unit and moved financial support away from the unit. CEO Ken Powell has said that canned and frozen vegetables are moving toward the lower end of the consumer market, and the company didn't want to follow. Neither General Mills, B&G, Cerberus, Platinum Equity or Bonduelle would comment or have responded immediately for comment.
B&G's brands include Vermont Maid Syrup, Pirate Brands, the maker of Pirate's Booty Popcorn and Cream of Wheat. In July, the company announced bought Spartan Foods of America Inc., which sells pizza crusts under the brand name Mama Mary's, for $50 million.
General Mills has recently cut funding for the iconic Jolly Green Giant brand, as consumers increasingly gravitate to fresh produce, and is concentrating on other areas of its business such as gluten-free Cheerios and Lucky Charms. Green Giant makes more than 160 products. It has struggled as consumer preferences are shifting away from sauced vegetable varieties to plainer varieties.