Danone Divests Stonyfield Allay Competition Concerns
03 Jul 2017 --- French food group Danone is pushing ahead with its sale of a US dairy subsidiary in a US$875 million deal with French multinational dairy products cooperation, Lactalis. The divestiture is a move to address the concerns of the US Department of Justice over Danone’s acquisition of American organic food group, WhiteWave.
Back in March, Danone reached an agreement with the US authorities to sell Stonyfield to allay competition concerns and has now announced Lactalis is buying up the subsidiary.
Stonyfield generated approximately US$370 million in turnover in 2016.
“Danone has entered into a binding agreement with Lactalis to sell Stonyfield, one of its U.S. dairy subsidiaries, for a purchase price of $875 million, representing 20 timesits EBITDA in 2016,” says a statement from Danone.
“The divestiture is part of the agreement reached on March 31st, 2017 with the U.S. Department of Justice (“DOJ”) in connection with Danone’s recently closed acquisition of WhiteWave.”
“The closing of the divestiture is subject to customary conditions, including final approval by the DOJ, and is expected in the third quarter of this year.”
In February, FoodIngredientsFirst reported how Danone had forecast slower profit growth this year and said it will seek to cut one billion euros ($1.1 billion) in costs by the end of the decade.
This comes at a time when the world’s largest yogurt maker continues to grapple with an expected surge in milk prices. The maker of Activia and Actimel has said that it is targeting earnings per share growth of more than five percent, which would be the slowest in three years.
And in April the French multinational completed the acquisition of organic producer Whitewave and under the merger agreement, the two will combine activities in North America to operate under the name “DanoneWave.”
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