General Mills to Sell Stake in Cereals LOS ANGELES (Reuters) - General Mills Inc. (GIS.N: Quote , Profile , Research ) on Monday said it will sell an $835 million stake in its cereal business to an affiliate of Lehman Brothers Holding Inc. (LEH.N: Quote , Profile , Research ) and use the money to buy back 16.5 million of its common shares from Diageo Plc (DGE.L: Quote , Profile , Research ) . The repurchase of shares from the British beverage conglomerate will be made in conjunction with Diageo's plan to sell about 33.4 million shares of General Mills stock in a public offering. Diageo currently owns about 79 million General Mills shares -- about a 20 percent stake in the Minneapolis company -- which it acquired when General Mills bought Pillsbury in October 2001. Diageo has said it planned to sell its General Mills stake over time, possibly to fund buybacks of its own stock. General Mills in June had registered the sale of most of Diageo's shares with U.S. Securities regulators, who declared the sale effective late last month. Lehman Brothers will raise $750 million by issuing three-year notes that are mandatorily exchangeable into General Mills common stock in October 2007, the cereal maker said in a statement. General Mills said it may also sell the Lehman affiliate a $750 million note to be exchanged into Class B preferred interests. The remaining $85 million stake would be paid for in cash at the time of the exchange. Lehman's stake in the unit, General Mills Cereals LLC, will be reflected as minority interests on General Mills' balance sheet. General Mills officials could not immediately be reached to say what percentage of its cereal business the Lehman affiliate will be acquiring. General Mills shares were down 80 cents, or 1.8 percent, at $44.50 around midday on Monday on the New York Stock Exchange. Quelle "General Mills to Sell Stake in Cereals" : reuters.com Main page for "General Mills to Sell Stake in Cereals"