UPDATE 1-General Mills buying Brazilian food company Yoki

Thu May 24, 2012 10:37am EDT

May 24 (Reuters) - General Mills Inc agreed to buy Brazilian food company Yoki Alimentos SA for about 1.75 billion Brazilian reais ($857 million) as it seeks a greater foothold in Latin America.

The addition of Yoki -- which sells more than 600 items under nine brands across Brazil, including Yoki and Kitano branded flours and other basic foods, snacks, side dishes and seasonings -- will more than double General Mills' annual sales in Latin America to nearly $1 billion.

Like most food and beverage companies, General Mills is trying to take advantage of growth in developing countries to offset slower growth in mature markets. The company acquired the Yoplait International yogurt business in 2011.

General Mills, which also owns Progresso soups, Cheerios cereal and Haagen-Dazs ice cream, said on Thursday that in the Yoki deal it will assume 200 million reais ($98 million) of Yoki debt.

It sees the deal closing in the first half of fiscal 2013, which begins May 28.

General Mills shares rose 34 cents, or 0.9 percent, to $38.93 in morning trade on the New York Stock Exchange.

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