General Mills Plans Spinoff of Its Restaurants : Corporations: Analyst praises the move, which will allow the parent to focus on consumer foods.

General Mills Inc. said Wednesday that it will spin off its restaurants as a separate company, effective June 1.

The as-yet-unnamed corporation will be the world’s largest full-service restaurant company, with about $3.2 billion in revenue. It will hold about 20% of the parent’s existing debt and include Red Lobster, Olive Garden and China Coast.

General Mills said the spinoff will allow it to focus on consumer foods, which include Betty Crocker mixes, Hamburger Helper, Wheaties, Cheerios and Pop Secret Microwave Popcorn.

“It’s a good move,” said Michael Kayes, an analyst with NationsBank Corp., which had 1.2 million General Mills shares as of Sept. 30. “It lets them concentrate on what they do best.”

General Mills shares rose $2.50 to close at $58 in New York Stock Exchange trading.

Each General Mills shareholder will receive one share of the new restaurant company for every share owned. The spinoff will take effect at the end of General Mills’ fiscal year, as Chairman and Chief Executive Bruce Atwater retires.

Atwater said the change will make the best use of his two top managers: Stephen Sanger, 48, who was elected president and chief executive of the food division, and Joe R. Lee, 53, elected to similar jobs for restaurants.