French dairy giant Danone SA yesterday said it has agreed to buy US organic foods producer WhiteWave Foods Co, with the aim of creating a world leader for organic produce.
The all-cash transaction values the US company at US$12.5 billion and would allow Danone to double its business in the US, the French group said in a statement, adding that it expected to finalize the deal by the end of this year.
“Our perfect complementarity will allow us to create a uniquely-positioned organic world leader,” CEO Emmanuel Faber said in a conference call.
Both companies’ boards of directors have unanimously approved the deal, Danone said.
WhiteWave produces a range of organic dairy products and plant-based dairy alternatives, achieving sales of US$4 billion last year with brands such as Silk milk and Earthbound Farm organic salad.
Since its stock market flotation in 2012, WhiteWave has generated an annual increase in operating profit of 20 percent, Danone said.
The French company said the deal would allow it to tap into consumer trends “for healthier and more sustainable eating and drinking options.”
“Organic foods and beverages and non-GMO plant-based alternatives to milk and yogurt are among the fastest growing categories in the industry,” Danone said.
Dairy products are already a core business for Danone, which employs 100,000 workers worldwide and generated sales of US$22.4 billion last year.
Its portfolio also includes baby food and water.
“The value creation profile is strong. We will contribute 100 years of research and development into protein fermentation, which will be combined with WhiteWave’s transformation know-how,” Faber said.
Danone said that it had offered to pay US$56.25 per share “representing a total enterprise value of approximately US$12.5 billion.”
It said the takeover is to be financed entirely by debt.
The deal, which is expected to produce annual synergies of US$300 million by 2020, has yet to be endorsed by WhiteWave’s shareholders and by anti-trust authorities.
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