DEFA14A 1 defa14a.txt DEFA14A SCHEDULE 14A INFORMATION Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 (Amendment No. ) Filed by the Registrant /X/ Filed by a party other than the Registrant / / Check the appropriate box: / / Preliminary Proxy Statement / / Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) / / Definitive Proxy Statement / / Definitive Additional Materials /X/ Soliciting Material Pursuant to Section 240.14a-12 GENERAL MILLS, INC. -------------------------------------------------------------------------------- (Name of Registrant as Specified In Its Charter) -------- -------------------------------------------------------------------------------- (Name of Person(s) Filing Proxy Statement, if other than the Registrant) Payment of Filing Fee (Check the appropriate box): /X/ No fee required. / / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. (1) Title of each class of securities to which transaction applies: ------------------------------------------------------------------------ (2) Aggregate number of securities to which transaction applies: ------------------------------------------------------------------------ (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): ------------------------------------------------------------------------ (4) Proposed maximum aggregate value of transaction: ------------------------------------------------------------------------ (5) Total fee paid: ------------------------------------------------------------------------ / / Fee paid previously with preliminary materials. / / Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. (1) Amount Previously Paid: ------------------------------------------------------------------------ (2) Form, Schedule or Registration Statement No.: ------------------------------------------------------------------------ (3) Filing Party: ------------------------------------------------------------------------ (4) Date Filed: ------------------------------------------------------------------------ A STRONGER PORTFOLIO [LOGOS] GEARED FOR FASTER GROWTH GENERAL MILLS ANALYST MEETING JULY 17, 2000 THIS PRESENTATION CONTAINS FORWARD-LOOKING STATEMENTS BASED ON MANAGEMENT'S CURRENT EXPECTATIONS AND ASSUMPTIONS. SUCH STATEMENTS ARE SUBJECT TO CERTAIN RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER. IN PARTICULAR, OUR PREDICTIONS ABOUT THE PILLSBURY ACQUISITION COULD BE AFFECTED BY REGULATORY AND STOCKHOLDER APPROVALS, INTEGRATION PROBLEMS; FAILURE TO ACHIEVE SYNERGIES; UNANTICIPATED LIABILITIES, INEXPERIENCE IN NEW BUSINESS LINES, AND CHANGES IN THE COMPETITIVE ENVIRONMENT. IN ADDITION, OUR FUTURE RESULTS ALSO COULD BE AFFECTED BY A VARIETY OF FACTORS SUCH AS: COMPETITIVE DYNAMICS IN THE U.S. READY-TO-EAT CEREAL MARKET, INCLUDING PRICING AND PROMOTIONAL SPENDING LEVELS BY COMPETITORS; THE IMPACT OF COMPETITIVE PRODUCTS AND PRICING; PRODUCT DEVELOPMENT; ACTIONS OF COMPETITORS OTHER THAN AS DESCRIBED ABOVE; ACQUISITIONS OR DISPOSITIONS OF BUSINESSES OR ASSETS; CHANGES IN CAPITAL STRUCTURE; CHANGES IN LAWS AND REGULATIONS, INCLUDING CHANGES IN ACCOUNTING STANDARDS; CUSTOMER DEMAND; EFFECTIVENESS OF ADVERTISING AND MARKETING SPENDING OR PROGRAMS; CONSUMER PERCEPTION OF HEALTH-RELATED ISSUES; ECONOMIC CONDITIONS, INCLUDING CHANGES IN INFLATION RATES OR INTEREST RATES; FLUCTUATIONS IN THE COST AND AVAILABILITY OF SUPPLY-CHAIN RESOURCES; AND FOREIGN ECONOMIC CONDITIONS, INCLUDING CURRENCY RATE FLUCTUATIONS. THE COMPANY UNDERTAKES NO OBLIGATION TO PUBLICLY REVISE ANY FORWARD-LOOKING STATEMENTS TO REFLECT FUTURE EVENTS OR CIRCUMSTANCES. TRANSACTION SUMMARY - General Mills will Acquire Pillsbury in a Stock-for-Stock Exchange - Diageo will Receive 141 Million General Mills Common Shares - Transaction Value includes $5.1 Billion of Pillsbury Debt - Contingent Payment under Certain Conditions - Total Transaction Value: $10.5 Billion [LOGOS] GENERAL MILLS ACCELERATED GROWTH 2010 GOALS

OLD MODEL NEW GOAL --------- -------- Reported Sales 6% 7%+ EPS Growth Target 10-13% 11-15%

[LOGOS] PROJECTED CASH FLOW FROM OPERATIONS (MILLIONS)

2001 2002 2003 2004 GENERAL MILLS 800 860 925 995 GENERAL MILLS / PILLSBURY 955 1390 1675 1870

[LOGOS] GENERAL MILLS GROWTH STRATEGIES - Product Innovation - Channel Expansion - International Market Expansion - Margin Expansion [LOGOS] STRATEGIC RATIONALE - Stronger, More Balanced Portfolio Geared for Faster Growth - Significant Synergies - Enhanced Shareholder Value [LOGOS] THE NEW GENERAL MILLS SALES: $12.8 BILLION* [GRAPH] GENERAL MILLS 60% PILLSBURY 40% Assumes Divestiture of Pillsbury Dessert Mixes and Green Giant Canned Vegetables * Includes Proportionate Share of GMI JV Sales [LOGOS] TOP NORTH AMERICAN FOOD COMPANIES (FOOD SALES IN BILLIONS) [GRAPH] Kraft/Nabisco 23.4* ConAgra 17.1 General Mills 10.9 Nestle 8.6 Pepsico (Frito Lay) 7.9 Unilever/Bestfoods 7.2 Sara Lee 6.9* Heinz 5.1 Campbell 4.8* Kellogg 4.4 Hershey Foods 4.0 Quaker Oats 2.4 Danone .7 Source: Annual Reports * U.S. Sales [LOGOS] TOP GLOBAL FOOD COMPANIES (FOOD SALES IN BILLIONS) Nestle 41.8 Kraft/Nabisco 35.1 Unilever/Bestfoods 30.5 ConAgra 19.0 General Mills 12.8 Pepsico (Frito Lay) 12.2 Sara Lee 10.6 Danone 9.9 Heinz 9.0 Kellogg 7.0 Campbell 6.4 Hershey Foods 4.0 Quaker Oats 2.9 Source: Annual Reports [LOGOS] GENERAL MILLS A STRONGER PORTFOLIO [GRAPH] INTERNATIONAL* $2.3 BILLION (18%) REFRIGERATED $1.8 BILLION (14%) FROZEN $.8 BILLION (6%) DRY GROCERY $6.2 BILLION (49%) FOODSERVICE $1.7 BILLION (13%) Assumes Divestiture of Pillsbury Dessert Mixes and Green Giant Canned Vegetables * Includes Proportionate Share of CPW and SVE Sales [LOGOS] POWERFUL BRAND LINEUP [LOGOS] GENERAL MILLS LEADING MARKET POSITIONS ($ IN MM)

CATEGORY DOLLAR SIZE SHARE RANK ---- ----- ---- BIG G CEREALS $7,500 33% 1 YOGURT 2,030 35 1 BETTY CROCKER DESSERTS 1,080 41 1 MICROWAVE POPCORN 690 24 2 REFRIGERATED MEALS 580 14 1 HELPER DINNER MIXES 570 63 1 FRUIT SNACKS 460 59 1 FAMILY FLOUR 340 41 1

Source: ACNielsen [LOGOS] PILLSBURY LEADING MARKET POSITIONS ($ IN MM)

3-YR. CATEGORY SALES DOLLAR SIZE CAGR SHARE RANK ---- ---- ----- ---- REFRIGERATED DOUGH 1,480 +5 79% 1 FROZEN VEGETABLES / MEAL STARTERS 2,080 -1 23 1 READY-TO-SERVE SOUP 1,400 +8 22 2 FROZEN BREAKFAST FOODS 870 +1 37 2 FROZEN HOT SNACKS 480 +8 33 1 MEXICAN DINNER KITS/SHELLS 280 +4 39 1

Source: ACNielsen [LOGOS] THE NEW GENERAL MILLS A FASTER GROWTH PORTFOLIO 1. Faster Growing Retail Categories -- Stronger Convenience Profile -- New Platforms for Innovation 2. Expanded Participation in High-growth Foodservice Business 3. Increased Presence in International Markets [LOGOS] FASTER GROWTH RETAIL CATEGORIES (3-YR. SALES CGR) GENERAL MILLS CATEGORIES 1% PILLSBURY CATEGORIES 4% Source: ACNielsen [LOGOS] STRONGER CONVENIENCE PROFILE (BILLIONS OF SALES $'S)

SCRATCH U.S. RETAIL READY TO EAT FAST PREP AND MIXES ----------- ------------ --------- --------- CURRENT GENERAL MILLS $4.0 $.3 $1.7 NEW GENERAL MILLS $4.1 $2.5 $1.9 - Big G Cereals - Refrigerated Dough - Dessert Mixes - Yogurt - Refrigerated - Helper Dinner Entrees Mixes - Snacks - Ready to Serve - Family Flour Soups - Ice Cream - Frozen Breakfast - Side Dish Foods Mixes - Frozen/Pizza/ - Mexican Snacks Dinners - Frozen Vegetables/ Meal Starters

[LOGOS] PILLSBURY'S DOUGH CORE $3.2 BILLION SALES INTERNATIONAL $0.3 FROZEN BREAKFAST $0.3 TOTINO'S PIZZA/SNACKS $0.4 FOODSERVICE $1.3 REFRIGERATED BAKED GOODS $1.0 [LOGOS] U.S. REFRIGERATED DOUGH CATEGORY SUMMARY Retail $ Sales $1.5 Billion 3-Yr. Category Growth $ 5% Units 2% Pillsbury $ Share 79% Household Penetration 74% Source: ACNielsen [LOGOS] REFRIGERATED DOUGH (U.S. Sales in Millions) [CHART] 7% CAGR from 1995-2000 F'95 $725 F'00 $1,025 [GRAPHIC] [LOGOS] REFRIGERATED DOUGH INNOVATION +16% CGR from 1998-2000 F'98 55.6 F'99 69.6 F'00 74.7 Holiday Cookies [PICTURE] [LOGOS] NEW INNOVATION PLATFORMS FROZEN FOODS [PICTURES] [PICTURES] Ice Cream Frozen Breakfast Foods [PICTURE] [PICTURE] Frozen Pizza/Snacks Meal Starters [LOGOS] NEW INNOVATION PLATFORMS SHELF STABLE FOOD Ready to Serve Soup [PICTURE] [PICTURE] Mexican Foods [LOGOS] NEW INNOVATION PLATFORMS FOR FASTER GROWTH (3-Yr. Sales CGRs) [CHART]

General Mills Retail Categories ----------------- Category Growth +1% General Mills Sales* +3%

Pillsbury Retail Categories ----------------- Category Growth +4% Pillsbury Sales* +3%

Source: ACNielsen * Excluding Acquisitions [LOGOS] STRONGER CONVENIENCE PROFILE PRODUCT INNOVATION [PICTURE] [PICTURE] [PICTURE] [PICTURE] [PICTURE] [PICTURE] [LOGOS] CHANNEL GROWTH PROJECTIONS

2000-2010 Projected Sales CGR ------------------- Traditional Grocery 1% Mass / Drug / Discount / Clubs 8% ------------------- Total Retail 3% Foodservice 6%

[LOGOS] PILLSBURY FOODSERVICE GROWTH (Sales $ in Millions) 19% CAGR from 1992-2000

F'92 F'95 F'00 EBIT Margin 8% 11% 14%

[LOGOS] FOODSERVICE BAKERY PRODUCTS $24 Billion Market Segment

3-YR. SALES GROWTH ------ Fast-growing Areas In-store / Retail Bakeries +4% Foodservice / Brands +5% Pillsbury Foodservice Sales +17% - Value-added Product Innovation

[LOGOS] PILLSBURY PRODUCTS IN GENERAL MILLS CHANNELS [PICTURE] Convenience Stores [PICTURE] [PICTURE] Schools/Colleges [LOGOS] STRONGER INTERNATIONAL PRESENCE ($ IN BILLIONS) [CHART] 1990* $.4 2000** $1.1 Pro Forma*** $2.3 * Shows 100% owned General Mills ** Shows 100% owned General Mills (.305) plus General Mills share of JVs (.824) *** Shows 100% owned General Mills (.305) plus General Mills share of JVs (.824) plus Pillsbury (1.159) PILLSBURY'S INTERNATIONAL BUSINESS TOTAL SALES $1.2 BILLION [CHART] - 30 PLANTS - 7,800 EMPLOYEES - 5-YR. SALES CGR = 5% [LOGOS] Pie chart depicts Europe (38%) - Major Markets: U.K., France, Spain, Germany Latin America (24%) - Major Markets: Argentina, Brazil, Venezuela Asia (21%) - Major Markets: Japan, Australia Canada (17%) INTERNATIONAL INFRASTRUCTURE Shelf Stable Frozen Refrigerated ------------ ------ ------------ Manufacturing X X X Distribution X X X Salesforce X X X Local Market Knowledge X X X [LOGOS] STRATEGIC RATIONALE - Stronger, More Balanced Portfolio Geared for Faster Growth - Significant Synergies - Enhanced Shareholder Value [LOGOS] SYNERGIES - Supply Chain Overlap and Increased Scale - Center Store (Dry Grocery) Distribution and Sales - Refrigerated Distribution - Marketing Spending Synergies - General and Administrative Cost Savings [LOGOS] SUPPLY CHAIN PRODUCTIVITY

GENERAL MILLS COST PER CASE INDEX ------------------- 1991 100 2000 91

[GRAPHIC] Increased Purchasing Leverage [GRAPHIC] Manufacturing Productivity [GRAPHIC] Distribution Efficiencies [LOGOS] PROJECTED COST SAVINGS - $25 MILLION IN 2001 - $220 MILLION IN 2002 - $400 MILLION IN 2003 [LOGOS] COMPATIBLE CULTURES - Roots in Minneapolis Milling Industry - Focus on Building Value-added Brands - Continuous Innovation Focus - Commitment to Corporate Citizenship [LOGOS] STRATEGIC RATIONALE - Stronger, More Balanced Portfolio Geared for Faster Growth - Significant Synergies - Enhanced Shareholder Value [LOGOS] DIAGEO EQUITY OWNERSHIP - 141 Million Shares, 33% Stake - Standstill on Additional Purchases - Pass-through Voting - Board Representation [LOGOS] CONTINGENT PAYMENT - Timing: First Anniversary of Close - Payment Determined by General Mills Average Stock Price GENERAL MILLS POTENTIAL DIVESTITURE - Pillsbury Dessert Mixes - Green Giant Canned Vegetables PROJECTED CASH FLOW FROM OPERATIONS (MILLIONS) [GRAPH]

2001 2002 2003 2004 GENERAL MILLS 800 860 925 995 GENERAL MILLS/PILLSBURY 955 1390 1675 1870

[LOGOS] PROJECTED FINANCIAL DATA ($ IN MILLIONS)

FY01 FY02 FY03 ---- ---- ---- Total Debt $ 8,300 $ 8,000 $ 7,500 Debt / EBITDA 4.6 3.0 2.4 Interest Coverage 3.3x 3.6x 4.4x

[LOGOS] PER SHARE IMPACT*

FY01 FY02 FY03 ---- ---- ---- Cash EPS ($.15) $.10 $.36 Goodwill ($.32) ($.48) ($.49) Book EPS ($.47) ($.38) ($.13)

Maintain Prevailing Dividend of $1.10 per Share * Assuming Divestitures [LOGOS] GENERAL MILLS GROWTH STRATEGIES - Product Innovation - Channel Expansion - International Market Expansion - Margin Expansion [LOGOS] THE NEW GENERAL MILLS 2010 EPS MODEL Established U.S. Businesses 8 - 9 pts. International Operations 1 - 2 pts. New Businesses 1 - 2 pts. Share Repurchase 1 - 2 pts. =============== CGR 11 - 15% [LOGOS] TIMELINE - General Mills and Diageo Shareholder Approval - Regulatory Review - Estimated Completion by December 2000 [LOGOS] IN CONNECTION WITH THIS TRANSACTION, GENERAL MILLS WILL BE FILING A PROXY STATEMENT WITH THE SECURITIES AND EXCHANGE COMMISSION. SECURITY HOLDERS OF GENERAL MILLS ARE URGED TO READ THE PROXY STATEMENT WHEN IT BECOMES AVAILABLE, BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION REGARDING THIS BUSINESS COMBINATION. INVESTORS AND SECURITY HOLDERS MAY OBTAIN A FREE COPY OF THE STATEMENT WHEN IT BECOMES AVAILABLE AT THE SECURITIES AND EXCHANGE COMMISSION'S WEBSITE AT http://www.sec.gov. A STRONGER PORTFOLIO [LOGOS] GEARED FOR FASTER GROWTH