Acquisition and Divestiture

6 Months Ended

Nov. 28, 2021

Acquisition and Divestiture [Abstract]

Acquisition and Divestiture

(2) Acquisition and Divestitures

During the second quarter of fiscal 2022, we entered into definitive agreements to sell our European dough businesses. The transactions are expected to close by the end of fiscal 2022, subject to appropriate labor consultations, regulatory approvals, and other customary closing conditions. The associated assets and liabilities have an immaterial impact on the presentation of our Consolidated Balance Sheets as of November 28, 2021.

During the first quarter of fiscal 2022, we acquired the Tyson Foods’ pet treats business for $1.2 billion in cash. We financed the transaction with a combination of cash on hand and short-term debt. We consolidated the Tyson Foods’ pet treats business into our Consolidated Balance Sheets and recorded goodwill of $759.4 million, indefinite-lived intangible assets for the Nudges, Top Chews and True Chews brands totaling $330.0 million in aggregate, and a finite-lived customer relationship asset of $40.0 million. The goodwill is included in the Pet reporting unit and is deductible for tax purposes. The pro forma effects of this acquisition were not material. The consolidated results of the Tyson Foods’ pet treat business are reported in our Pet operating segment on a one-month lag. Accordingly, our Consolidated Statements of Earnings include four months of operating results for the acquired business for the six-month period ended November 28, 2021.

During the first quarter of fiscal 2022, we entered into a definitive agreement to sell our 51 percent controlling interest in Yoplait SAS, and our 50 percent interest in Yoplait Marques SNC and Liberté Marques Sàrl to Sodiaal International (Sodiaal) in exchange for full ownership of the Canadian Yoplait business, a reduced royalty rate for the use of Yoplait and Liberté brands in the United States and Canada, and cash. The transaction closed subsequent to the end of the second quarter of fiscal 2022. We expect to record a pre-tax gain on the sale of this business during the third quarter of fiscal 2022. We have classified all Yoplait SAS, Yoplait Marques SNC and Liberté Marques Sàrl assets and liabilities as held for sale in our Consolidated Balance Sheets as of November 28, 2021.

The components of assets held for sale and liabilities held for sale are as follows:

In Millions	Nov. 28, 2021
Cash and cash equivalents	$	123.7
Receivables		111.2
Inventories		24.6
Prepaid expenses and other current assets		18.4
Land, buildings, and equipment		164.3
Goodwill		194.9
Other intangible assets		621.8
Other assets		4.3
Assets held for sale	$	1,263.2
Accounts payable	$	90.8
Current portion of long-term debt		56.6
Notes payable		262.9
Other current liabilities		102.3
Deferred income taxes		77.7
Other liabilities		14.0
Liabilities held for sale	$	604.3