Danone to Acquire US-based Organic Foods Giant in $12.5 Billion Deal
Danone is acquiring The WhiteWave Foods Company, a global leader in organic foods, for $56.25 per share in an all-cash transaction, representing a total enterprise value of approximately $12.5 billion, including debt and certain other WhiteWave liabilities. The transaction has been unanimously approved by the boards of both companies. Its price represents a premium of approximately 24 percent over WhiteWave’s 30-day average closing trading price ($45.43). The transaction is expected to close by the end of the year, subject to the approval of WhiteWave’s shareholders, regulatory approvals, and customary conditions.
WhiteWave is a global company which generated $4 billion in sales in 2015 and has a portfolio of large and leading branded platforms in North America and Europe in high-growth, on-trend food and beverage categories which focus on premium organic dairy, non-GMO, plant-based alternatives to milk and yogurt, fresh foods, and coffee creamers. WhiteWave has a successful track record of transforming categories and creating large scale brands. WhiteWave’s business includes highly recognized, category leading brands such as Silk®, So Delicious®, Vega™, Alpro®, Provamel®, Horizon Organic®, Wallaby Organic®, Earthbound Farm® and International Delight®. Since becoming a public company in 2012, WhiteWave’s sales have increased at a 19 percent compound annual growth rate through 2015, and WhiteWave has doubled its operating income during this period.
The deal represents a key opportunity to enhance Danone’s growth profile and will expand WhiteWave’s growth opportunities.
WhiteWave is well positioned in high growth categories that are supported by strong consumer trends for healthier and 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. WhiteWave has been the fastest growing food and beverage company in the United States and one of the fastest growing in Europe for the past four years. In joining Danone, WhiteWave will have the opportunity to continue its industry-leading growth as part of a larger global company with substantial financial, geographic and operational resources. Upon closing the transaction, Danone will have one of the most extensive portfolios of brands and products in fresh dairy, organic foods and beverages and plant-based alternatives to milk & yogurt.
Emmanuel Faber, chief executive of Danone.
The acquisition will also help Danone in building a stronger North America platform. The transaction further diversifies Danone’s portfolio and broadens its presence in North America. The combination of Danone and WhiteWave will create a leading US refrigerated dairy player, as well as one of the top 15 largest US food and beverage manufacturers. Following the closing of the transaction, Danone’s North America footprint would increase from 12 to 22 percent of Danone’ total portfolio.
Emmanuel Faber, chief executive of Danone, comments: “This unique combination positions us better to address tomorrow’s consumer trends and represents a great opportunity to step change the ambition of our plan for an Alimentation revolution and to accelerate our path towards strong sustainable and profitable growth by 2020. 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.”
Danone expects the transaction to be solidly accretive to Danone’s earnings within the first year after closing and to be above 10 percent accretion based on expected run-rate synergies. The transaction is expected to result in approximately $300mn of EBIT synergies by 2020.
The acquisition of WhiteWave is expected to be fully financed with debt for which Danone has received commitments from its banks. Danone expects to maintain a strong investment grade rating.
