Danone agreed to buy WhiteWave Foods Co. for about $10 billion, adding the best-selling U.S. soy milk brand Silk and a line of plant-based foods and doubling its size in that market.
Investors will receive $56.25 a share in cash, Paris-based Danone said in a statement Thursday. That’s 19 percent higher than WhiteWave’s closing price Wednesday. The yogurt maker will finance the purchase through debt and expects a $300 million boost to operating profit by 2020. The purchase will be “solidly accretive” to results in the first year after closing, Danone said.
The acquisition give would Danone the global leader in fresh dairy, health-food brands including Horizon milk, Wallaby Organic yogurt and Earthbound Farm packaged salads as consumers increasingly scrutinize labels and shun processed foods. WhiteWave’s Silk is the biggest-selling soy milk brand in the U.S., where some consumers are shifting to plant-based alternatives to dairy.
“This acquisition advances Danone’s mission and rich history of being at the forefront of emerging consumer trends,” Chairman Franck Riboud said in the statement. WhiteWave Chief Executive Officer Gregg Engles will join Danone’s board.
Sales at Denver-based WhiteWave will increase about 11 percent this year, based on the average of analyst estimates, after doubling since 2010 on rising demand for more healthful beverages and food, data compiled by Bloomberg show. North America accounted for 86 percent of the company’s $3.9 billion in revenue last year, with Europe contributing the rest, according to data compiled by Bloomberg.
“The value-creation profile of this combination is very strong because the company has presence in categories that are growing strongly but in stable regions,” Danone Chief Executive Officer Emmanuel Faber said on a conference call with journalists.
Danone, which makes Oikos Greek-style yogurt and Evian water, is targeting sales growth of more than 5 percent by 2020, with half of its business keying in on consumers seeking healthy-eating alternatives. North American sales will be 22 percent of Danone’s total revenue after the purchase, compared with 12 percent now.
The purchase values WhiteWave at $12.5 billion including net debt and other liabilities. The shares have jumped 22 percent this year to close at $47.43 in New York trading Wednesday. Danone has increased 1.7 percent this year. The companies expect to complete the deal this year.
Danone paid 12.3 billion euros for Schiphol, Netherlands-based Royal Numico NV, in 2007. Numico makes baby-food and had a division focusing on products for people whose diets are restricted by illnesses.
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