Danone Agrees to Buy WhiteWave in $10 Billion Deal
July 07 2016 - 2:10AM
Dow Jones News
PARIS—Danone has agreed to buy organic foods producer WhiteWave
Foods for about $10 billion, boosting the world's largest yogurt
maker's presence in the U.S.
The French dairy company will pay $56.25 a share in cash, the
company said Thursday. The offer represents an enterprise value of
approximately $12.5 billion, including debt and certain other
WhiteWave liabilities, representing a 24% premium over WhiteWave's
30-day average closing trading price, Danone said.
Emmanuel Faber, Danone's chief executive, took the reins of the
company in October 2014 and has vowed to return Danone to
sustainable growth, reviewing its business in China and overhauling
its fresh dairy unit. The deal—Danone's largest acquisition in a
decade—will boost the company's upmarket product line with brands
including Horizon Organic milk and Silk almond milk.
"It will allow us to enhance Danone's growth profile and
reinforce our resilience through a broader platform in North
America," Mr. Faber said.
WhiteWave, based in Denver, Colorado, has been one of the
fastest-growing companies in the sector in recent years, lifted by
rising demand for healthy and organic foods which has transformed
the food industry in the U.S. It reported net profit of $168
million on revenue of $3.9 billion in 2015.
It was spun out of Dean Foods in 2013 and analysts have
speculated that it could be a target for larger food companies.
Danone, whose portfolio of brands include Actimel and Activia,
recently raised its 2016 guidance but its performance has been
hobbled by more challenging markets including Russia and Brazil.
With the acquisition of WhiteWave, Danone's North America sales
will rise to 22% of its revenue, up from 12%.
The yogurt maker will finance the deal through debt and said it
expects it to increase operating profit by $300 million by
2020.
The deal is expected to close by the end of the year, subject to
WhiteWave shareholders' approval and regulatory approvals.
Write to Nick Kostov at Nick.Kostov@wsj.com
(END) Dow Jones Newswires
July 07, 2016 02:55 ET (06:55 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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