Acquisition of WhiteWave Foods
Acquisition obliges Danone to sell Stonyfield
French dairy giant Danone has agreed to sell Stonyfield, Danone's organic yogurt brand. The sale was necessary to obtain approval from the US competition authorities for the acquisition of WhiteWave Foods.
Danone and the US competition authorities were able to reach an agreement on Friday, March 31, regarding the acquisition of WhiteWave Foods. According to Danone, that agreement should ensure that the acquisition can be completed shortly.
However, the company has indicated that it will wait with the sale of Stonyfield until the acquisition of WhiteWave Foods is completed. 'We want to find a suitable partner for Stonyfield. A company that will help Stonyfield grow in the future. That could take a little more time," said Emmanuel Faber, CEO of Danone.
Not the ideal solution
"Of course, this isn't the ideal solution, but it won't cause major losses at Danone either," said Pierre Tegner, an analyst at Natixis. He conducted research into the consequences of the takeover.
According to Tegner, the sale of Stonyfield, the French dairy giant, will cost about 0,4 percent per share annually. In addition, he expects that the sales value of Stonyfield will be around 871 million euros.
What can I expect?
The acquisition will double Danone's market share in America. In 2015, WhiteWave achieved a turnover of 3,6 billion euros there. It is also expected that 0,5 to 1 percent more annual turnover will be achieved with the acquisition of WhiteWave.
It is also the largest acquisition that Danone has made since 2007. Then the French company took over the Dutch Numico. It is Emmanuel Faber's first big deal since he was appointed in 2014.
Faber says the sale of Stonyfield will not change the expected benefits of the WhiteWave acquisition. "In fact, this agreement ensures that we have the opportunity to close the acquisition of WhiteWave in a nutshell."
Stonyfield and Danone
Food company Stonyfield was founded in 1983. Its founding was based on the rising demand for organic dairy products in America. In 2001 the French Danone showed interest in the group and since 2004 Danone has control within the company. Stonyfield managed to achieve a turnover of approximately 331 million euros last year.
Danone makes up Thursday 7 July 2016 already announced to acquire the food group WhiteWave Foods. The dairy giant is investing around 11 billion euros for the acquisition. With this acquisition, Danone hopes to give a kickstart to declining dairy consumption.
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Kimberly Baker
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