11:10 AM EDT, 09/19/2024 (MT Newswires) -- General Mills ( GIS ) is still looking for attractive acquisition targets to "bolt on" to existing businesses after recently divesting its yogurt segment, Chief Executive Officer Jeff Harmening said Wednesday on the company's earnings call.

The maker of Lucky Charms and Cheerios said Sept. 12 it was selling its North American yogurt business to Lactalis and Sodiaal in cash transactions valued at a combined $2.1 billion. General Mills ( GIS ) expects the deals, forecast to close in 2025, to be 3% dilutive to adjusted EPS in the first 12 months after the completion with the use of proceeds for share repurchases.

The company sees potential in the near term to acquire assets in the $1 billion to $2 billion range.

"At this size, the company would likely not need to curtail share repurchases (especially when considering the upcoming proceeds from the yogurt divestiture)," Thomas Palmer, senior equity analyst at Citigroup, said in a note.

While General Mills ( GIS ) eyes smaller businesses to acquire, a larger acquisition isn't completely off the table, Harmening said.

"If something bigger came along that we don't see now, we could entertain the notion," he said. "But for us, it seems like our focus right now and what we see in the marketplace really is probably more availability of smaller-sized assets that we could bolt on that would enhance our growth. And importantly, we're able to do these bolt-on acquisitions and repurchase shares at the same time."

General Mills ( GIS ) on Wednesday reported fiscal Q1 adjusted diluted per-share earnings of $1.07, down from $1.09 a year earlier. The Capital IQ consensus estimate by analysts was $1.06. Net sales fell to $4.85 billion from $4.90 billion with the consensus at $4.80 billion.

The company reaffirmed its fiscal 2025 outlook of organic net sales in a range of flat to up 1% and adjusted diluted EPS in a range of down 1% to up 1%. The targets don't reflect the impact of the yogurt divestitures, and the company expects to incorporate the asset sales into its outlook after the deals close.

Harmening said acquisition targets should offer General Mills ( GIS ) "the right to win," which are generally the company's international businesses, though he didn't rule out looking at domestic companies.

"But really, where we have a competitive advantage, where we see growth, maybe get a little synergies along the way," he said. "Those are the places where we will continue to look."

Share of General Mills ( GIS ) fell 0.6% in recent trading Thursday.

Price: 74.58, Change: -0.43, Percent Change: -0.57