Purchase to double US business for Danone
Print Edition
FRANCE’S Danone said yesterday that it would double the size of its US business by buying organic foods producer WhiteWave Foods Co in a deal worth US$12.5 billion, including some US$2.1 billion of debt and “other” liabilities.
The purchase will help the French company to pursue affluent consumers by adding WhiteWave’s popular health food offerings such as Silk almond milk, Earthbound Farm Organic salad and Horizon organic milk to its product range as it struggles with setbacks in more challenging markets such as Brazil and Russia.
It is the first major transaction by Emmanuel Faber who took over as Danone’s chief executive in 2014 and has vowed to return the group to “strong profitable and sustainable growth” by 2020.
Danone, best known for its yogurts Activia and Actimel, said it was offering US$56.25 per share in cash to value WhiteWave’s equity at US$10.4 billion, making it Danone’s largest acquisition since the purchase of Dutch baby foods group Numico in 2007.
“We are creating a truly global leader in line with lasting consumer trends for more healthier options,” Faber told a call with analysts.
Shares in WhiteWave closed trading on Wednesday at US$47.43, while Danone said its offer represented a 24 percent premium to WhiteWave’s 30-day average closing price.
WhiteWave’s products have outperformed mainstream packaged food businesses in recent years as they are in line with a consumer shift toward natural foods and healthier eating.
The US firm has been seen as an attractive takeover target since its spin-off from Dean Foods, especially for companies like General Mills and Campbell Soup that have been buying healthier brands or reformulating their existing products.
“WhiteWave is the fastest growing US food company (10 percent compounded annual growth rate like-for-like sales over the last three years, 20 percent including acquisitions) and an excellent fit with Danone, focusing on organic, dairy foods,” said Canaccord Genuity Ltd analysts.
WhiteWave generates US$4 billion of sales and Danone said it will be able to achieve synergies of US$300 million by 2020, representing 8 percent of WhiteWave’s 2015 sales and 80 percent of WhiteWave 2015 earnings before interest and taxes.
However, Danone is paying about 21.2 times 2016 estimated EBITDA for WhiteWave. That is above an average multiple of around 15 times in recent dairy deals.
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 沪ICP证：沪ICP备05050403号-1
- |
- 互联网新闻信息服务许可证：31120180004
- |
- 网络视听许可证：0909346
- |
- 广播电视节目制作许可证：沪字第354号
- |
- 增值电信业务经营许可证：沪B2-20120012
Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
