General Mills will sell Green Giant to B&G

General Mills Inc. has agreed to sell its Green Giant and Le Sueur vegetable businesses to B&G Foods Inc. for about $765 million, part of an effort to off-load mature brands in favor of faster-growing areas.

The cash transaction is expected to close by the end of the calendar year, Minneapolis-based General Mills said in a statement Thursday. As part of the agreement, the food company will continue to operate the Green Giant business in Europe and other markets under a license from B&G.

General Mills is one of several U.S. food giants rethinking their product lineups. As consumers shift away from frozen and canned vegetables, the companies are seeking items that better appeal to modern tastes. Green Giant and Le Sueur generated about $585 million in revenue for General Mills last year.

The deal will help the company focus on brands and categories with "the greatest future growth opportunities," the company said in the statement. It also will use proceeds from the transaction to pay down debt and make stock repurchases.

Still, the loss of the Green Giant brand - known for a leaf-clad colossus who bellows "ho, ho, ho" - will take a toll on earnings this year. General Mills expects the sale to reduce profit by 5 to 7 cents a share in fiscal 2016, which ends in May.

The company, which was advised by Rothschild on the transaction, plans to give more details about the effect when it reports quarterly results on Sept. 22.

General Mills closed up 1.4 percent to $57.61 in New York Stock Exchange trading Thursday. Shares of B&G, a Parsippany, N.J., company that owns brands such as Ortega and Pirate's Booty, jumped 12 percent to $34.

B&G said separately that the deal would boost earnings by $95 million to $100 million a year.