Danone to Sell Stonyfield to Gain WhiteWave US Clearance
31 Mar 2017 --- Danone has made a major step towards the closing of the WhiteWave acquisition after reaching an agreement with the Antitrust Division of the United States Department of Justice, Danone has decided to sell one of its US dairy subsidiaries, Stonyfield.
This is a major step for WhiteWave and this move is expected to permit closing to occur shortly after, allowing the company to proceed at the soonest with the integration and reap the full benefits of the announced synergies.
While Stonyfield has been a valued part of Danone’s portfolio and remains a highly attractive asset, its divestiture does not impact the strategic rationale or financial benefits of the WhiteWave acquisition. Stonyfield generated approximately $370 million in turnover in 2016.
As part of this announcement, Danone reconfirms the value creation expected from the transaction, which includes:
• Significant run-rate EBIT synergies of $300 million by 2020
• Improvement of Danone’s full year like-for-like sales growth profile by an extra +0.5% to +1%
• Accretion of EBIT margin from 2018
• Solid EPS accretion from 2017 and above 10% based on run-rate synergies.
Emmanuel FABER, Chief Executive Officer of Danone, said: “As part of the agreement in principle with the DOJ, we made the strategic decision to divest Stonyfield as it allows us to take a major step towards completing the WhiteWave transaction expeditiously. This is a good outcome as it addresses the DOJ’s concerns and enables Danone to shortly begin to capture the benefits of the combination, and the value creation announced last July.”
“WhiteWave is expected to accelerate Danone’s 2020 profitable growth journey, drive strong value creation and deliver attractive financial benefits, including an above 10% EPS accretion based on run-rate synergies. Through this perfect match, we will bring together complementary portfolios, including some of the fastest growing, health-focused categories that are strongly aligned with long term consumer trends. The combination will allow us to develop a world-leading dairy and plant-based food and beverage portfolio, with a full spectrum of better-for-you offerings, including protein-rich, organic, non-GMO and nutrient-dense choices. With this wider variety of great tasting products, we will reach more consumers and be able to play in more meal occasions and consumption moments like snacking and on-the-go. This acquisition will drive both our business performance and our Alimentation Revolution as we offer healthier and more sustainable eating and drinking options for consumers.”
Through the WhiteWave transaction, Danone will strengthen and expand its position in resilient growth markets. Danone will notably double the size of its North America business to more than $6 billion in turnover, allowing the company to become a Top 15 Food & Beverage company in the US and the number one in refrigerated dairy (excluding cheese) in this key strategic geography. The transaction also offers the potential to broaden Danone’s reach across geographies through new high growth categories in the future.
Emmanuel FABER continued: “While as part of our agreement with the DOJ, we have made the
strategic decision to divest our Stonyfield business, we are proud of all that we have accomplished together. We are committed to finding the right partner to support Stonyfield growth journey in the future. In doing so we will attract more competition and capital into the U.S. organic segment, creating an opportunity for it to grow even faster.”
