Danone, the world’s largest yogurt maker and seller of Evian water, announced on Thursday that it agreed to acquire U.S. organic food maker WhiteWave Foods Co (NYSE: WWAV), which is best-known for its Horizon Organic milk and the Silk almond beverage, in a deal of $12.5 billion, including debt. This deal will double Danone’s business in the United States and was its largest acquisition since 2007 when Danone bought Dutch Group Numico.
According to the deal, Danone will pay $56.25 per share in cash, which represents a 24% premium over WhiteWave Foods’s 30-day average closing trading price, to WhiteWave Foods shareholders. The deal is expected to close by the end of the year and it is also Emmanuel Faber’s, the chief executive of Danone, first major deal since he became Danone’s chief executive in 2014.
WhiteWave Foods was spun off by Dean Foods in 2012, and it became the attractive target company since then. According to an analyst, companies such as The Coca-Cola Co, PepsiCo, Inc., Campbell Soup Company and Kellogg Co showed interest in WhiteWave Foods.
The acquisition will be beneficial to Danone as WhiteWave Food’s well-known products such as Horizon Organic milk, Silk Almond Milk and Earthbound Farm Organics salad will be added to Danone, which would boost the size of Danone’s business in North America to 22%, nearly twice the size now, which is 12%. This is a good news for Danone when it had a hard time in Brazil and Russia, which have more challenging markets.
“It will allow us to enhance Danone’s growth profile and reinforce our resilience through a broader platform in North America. We are convinced that combining with WhiteWave will create significant value for all of our stakeholders.” Faber said.
“Danone is a unique company, with distinctive capabilities that will enable WhiteWave to reach its next phase of growth,” Gregg L. Engles, the WhiteWave chairman and chief executive, said. “Danone is a great cultural fit for our organization, and I am excited for our employees to benefit from the opportunities presented by joining Danone, a leading global food company and the ideal strategic partner to support our future.”