Danone makes €9bn bid for US organics in culture shift
Emmanuel Faber's first big move as Danone's chief, the $10bn (€9bn) takeover of WhiteWave Foods, is a foray into soy milk, protein shakes and kale aimed at kickstarting growth at the French yogurt maker that's grappling with a drop in dairy consumption.
The Paris-based producer of Actimel drinks agreed to buy the US firm for $56.25 a share in cash, gaining leadership in the burgeoning natural and organic food sector through its biggest acquisition in almost a decade.
After spending his first year trying to revive sluggish sales in Danone's core European dairy segment, Mr Faber is now expanding his portfolio to include a range of faster-growing, higher-margin items.
They include the Silk brand soy beverage, cashew milk and soy yogurts catering to more affluent and health-conscious consumers. The deal's a victory for Douglas L Braunstein and James C Woolery, former JPMorgan Chase bankers, who prodded WhiteWave to consider a sale through their investment fund.
"The purchase will allow us to double the size of our US business and become the world leader in organic," Mr Faber, who joined Danone in 1997 and became ceo in October 2014, said. WhiteWave soared 19pc to $56.60 in trading before US exchanges opened, exceeding Danone's bid. An analyst at Jefferies said WhiteWave may attract other bidders. Danone rose 4pc to €65.83 at 1:41 pm in Paris yesterday, paring an earlier gain of as much as 7.2pc.
The acquisition would make Danone the global leader in fresh dairy and health-food brands including Horizon milk, Wallaby Organic yogurt and Earthbound Farm packaged salads as consumers turn away from processed foods.
The deal is the second potential takeover in the food industry in recent weeks, following Mondelez International's advance towards Hershey, which the chocolate maker snubbed. Both deals aim to beef up the acquirer's presence in the US.
In recent years, dairy milk's reputation as nature's perfect food has suffered.
The US organic-food market expanded 11pc in 2015 to $43bn. The overall food industry grew 3.3pc, according to the Organic Trade Association. (Bloomberg)