Danone Buys Colorado-Based Organic Food Maker WhiteWave Foods in $12.5 Billion Deal

07 Jul 2016 --- France's Danone is to buy WhiteWave Foods, the US organic food maker, in a $12.5bn deal including debt. The acquisition of WhiteWave, based in Colorado, marks Danone’s biggest deal in the past 10 years. The world’s biggest yogurt maker said it would pay shareholders in WhiteWave $56.25 per share in cash. Shares in WhiteWave were valued at $47.4 on Wednesday, valuing the company at $8.33bn.

The deal will substantially boost Danone's offering in the US by adding premium grocery brands such as Silk almond milk and Earthbound Farm Organic salad to its portfolio.

The deal will nearly double Danone's footprint in the US.

WhiteWave has long been considered an acquisition target for a food giant such as Danone or Campbell Soup.

Since becoming a public company in 2012, WhiteWave's sales have lifted by 19 percent through to 2015 and WhiteWave has doubled its operating income over the period. In 2015, it made sales of around $4bn.

The acquisition of WhiteWave comes as Danone looks to battle challenging markets such as Russia.

Emmanuel Faber, Danone CEO, said: “At Danone, we constantly seek to align our vision of the world, our mission and our businesses: we believe we have a special responsibility, as expressed in our Manifesto, to help and support people in adopting healthier and more sustainable eating and drinking practices and constantly evolve our portfolio of brands and products to achieve this objective.

“To that extent, we found in WhiteWave the perfect alliance as we both believe in a healthier future and are conscious of our power to lead society forward.”

“This unique combination positions us better to address tomorrow’s consumer trends and represents great opportunity to step change the ambition of our plan for an Alimentation revolution and to accelerate our path towards strong sustainable and profitable growth by 2020.”

“It will allow us to enhance Danone’s growth profile and reinforce our resilience through a broader platform in North America. We are convinced that combining with WhiteWave will create significant value for all of our stakeholders.”

Speaking to analysts, chief executive Faber said:"We are creating a truly global leader in line with lasting consumer trends for more healthier options."

"This transaction will create a leading US refrigerated dairy player, as well as one of the top 15 largest US food and beverage manufacturers."

“The value-creation profile of this combination is very strong because the company has presence in categories that are growing strongly but in stable regions,” he added.

Gregg Engles, WhiteWave chairman and chief executive officer, said: “Today’s announcement is an exciting next chapter for WhiteWave, bringing together two leading companies with a shared mission of changing the way the world eats for the better."

“We believe this is a compelling transaction that delivers significant cash value to our shareholders. Danone is a unique company with distinctive capabilities that will enable WhiteWave to reach its next phase of growth.”

Engels also said: "WhiteWave is in the sweet spot of where consumers are going. Driving WhiteWave's growth are large and leading branded platforms. We have ten powerful brands that each hold number one or two positions in their respective categories."

“Danone is a great cultural fit for our organization and I am excited for our employees to benefit from the opportunities presented by joining Danone, a leading global food company and the ideal strategic partner to support our future. I am pleased to be joining Danone’s Board to assist with the exciting and unique journey combining our two companies.”

by John Reynolds