The French dairy company Danone – known for its yogurt brands Activia and Actimel, as well as water brand Evian – agreed an all-cash deal with WhiteWave, worth £43.36 ($56.25) per share. Danone said the deal “doubles the size of [its] US business.”
The acquisition, confirmed last week (Thursday July 7), would make Danone the world’s biggest producer of organic food.
The price of the transaction signified a premium of around 24% over WhiteWave’s average 30-day closing trading price of £35.02 ($45.43).
Both Danone’s and WhiteWave’s board of directors unanimously agreed to the transaction, which is due to be completed by the end of the year.
The right transaction at the right time
Danone chairman Franck Riboud said: “I believe this acquisition advances Danone’s mission and rich history of being at the forefront of emerging consumer trends and commitment to creating economic and social value.”
Riboud added: “We believe WhiteWave’s size, positioning and geographical footprint fit perfectly with Danone’s strategy and that it is the right transaction at the right time.”
WhiteWave chairman and ceo Gregg Engles said: “We believe this is a compelling transaction that delivers significant cash value to our shareholders. Danone is a unique company with distinctive capabilities that will enable WhiteWave to reach its next phase of growth. Danone is a great cultural fit for our organisation.”
Boost Danone’s sales in North America
According to reports, Danone has struggled in recent years to maintain market growth, especially in Europe and South America, due to the rise of smaller yogurt brands including Chobani, Noosa and Fage. The deal with WhiteWave will boost Danone’s sales in North America to combat its stagnant growth elsewhere in the world.
Danone ceo Emmanuel Faber said: “We found in WhiteWave the perfect alliance as we both believe in a healthier future and are conscious of our power to lead society forward.”
Meanwhile, WhiteWave’s revenue grew by 12.5% from 2014 to 2015. The bulk of its £3bn ($3.87bn) revenue came from the US, with £450M ($580M) in sales coming from Europe.
Danone and WhiteWave deal – at a glance
- Danone buys WhiteWave for £9.6bn
- All-cash deal worth £43.36 ($56.25) per WhiteWave share
- 24% premium over WhiteWave’s average 30-day closing trading price