US: Danone To Buy WhiteWave In $12.5bn Deal

Danone has announced a deal to acquire WhiteWave Foods, in a deal worth $12.5bn including debt.

WhiteWave produces premium grocery brands as Horizon Organic milk, Silk soya milk, and Earthbound Farm Organic salads. The company has been reporting strong sales growth in recent years, and generated revenues of $3.9bn in 2015.

Danone is offering $56.25 per WhiteWave share in cash, a 24% premium to the average closing price over the last month, giving the target an enterprise value of around $12.5bn.  The French group plans to finance the deal through debt.

The deal, expected to be completed by the end of the year, is the first major acquisition by CEO Emmanuel Faber since his appointment in 2014.  It is also Danone’s largest deal in more than a decade.

Faber said the deal will “enhance Danone’s growth profile and reinforce our resilience through a broader platform in North America”. He added: “This transaction will create a leading U.S. refrigerated dairy payer, as well as one of the top 15 largest US Food and Beverage manufacturers”.

Following the deal, the North American unit will account for 22% of Danone’s total sales, up from 12% currently.  The acquisition will also boost Danone’s operating profit by $300m by 2020.