General Mills sells Green Giant

MINNEAPOLIS – Green Giant, one of Minnesota’s best-known brands for nearly a century, is moving to New Jersey.

General Mills Inc., which picked up Green Giant in its 2001 merger with Pillsbury Co., agreed Thursday to sell the business to B&G Foods for $765 million in cash.

The deal will nearly double B&G’s size. It also immediately raises B&G’s profile with retailers as one of the biggest purveyors of vegetables in North America.

For General Mills, Green Giant’s $585 million in annual sales represented only about 4 percent of its business. The company put it up for sale earlier this year as part of a broader effort to focus on faster-growing businesses.

Green Giant’s frozen and canned vegetables also have come under competitive pressure, and its sales were about $100 million higher several years ago. General Mills earlier this year took a $260 million charge it said was related to the value of Green Giant.

Even so, General Mills chief executive Ken Powell said earlier this year Green Giant is “a good, profitable brand.”

The sale is an “acknowledgment of the challenges facing the frozen vegetable business, which has been losing out as consumers maintain a penchant for fresh fare,” Morningstar analyst Erin Lash wrote in a research note.

Other major consumer product companies – including Campbell Soup, Kraft and Unilever – have also “shed noncore brands to focus resources on the highest return opportunities,” Lash wrote.

B&G chief executive Robert Cantwell said the company will double what General Mills has spent marketing Green Giant products in recent years.

“It makes more sense under B&G’s ownership,” Cantwell said. “We’re going to pay a lot more attention. It’s very important to us.”

General Mills said it will use proceeds from the sale for share repurchases and to pay down debt.