Breaking: Danone to acquire WhiteWave for $12.5B

By Carolyn Heneghan | July 7, 2016

Dive Brief:

• Danone has agreed to acquire WhiteWave Foods at a price of $56.25 per share in cash, or about $12.5 billion including debt and other WhiteWave liabilities.
• The offer stands at a 24% premium over WhiteWave's 30-day average closing trading price, according to Danone.
• Danone will increase its North America revenue share from 12% to 22% with the WhiteWave acquisition. This makes Danone more competitive against other European rivals with a strong presence in the market, like Nestle and Unilever.  

Dive Insight:

WhiteWave has reported double-digit growth across a number of its natural and organic brands and business segments. The plant-based foods and beverages and premium dairy segments saw sales jump 29% and 16%, respectively, in the latest reported quarter. Total revenues for the company increased 14% to $1.04 billion, attributed in large part to strategic, high-growth acquisitions like Vega and Wallaby.

WhiteWave is a viable solution to issues Danone faces in other parts of the world, where dairy demand slowdowns, particularly in markets like Russia and Brazil, have weighed down recent financial performances for the yogurt giant. Last month, Danone made an unscheduled announcement and raised its 2016 profit margin target. Now it expects the WhiteWave deal to increase operating profit by $300 million by 2020, Danone said. 

For Danone, WhiteWave is more than a boost to revenue and revenue share in North America. WhiteWave also represents a key entry point into plant-based foods and beverages, a major growth category in the U.S. that has been a focal point for many startups and VC investments. A leader in the space, WhiteWave recently announced it had identified an additional $3 billion in sales as the category continues to grow.

WhiteWave also holds a strong position in the produce department along the perimeter of grocery stores with its Earthbound Farm organic salads brand. Though the brand has had sales setbacks in recent years, WhiteWave believes the brand is poised for a turnaround thanks to internal operational improvements, new fresh and frozen product development, and overall category growth for packaged salads.

The WhiteWave deal fits into Danone CEO Emmanuel Faber's plan. Faber took over in 2014 and vowed to return the company to "strong profitable and sustainable growth" by 2020. Danone also announced last week the first investment made by its new venture capital unit, Danone Manifesto Ventures, in Michel et Augustin, a French manufacturer of assorted premium products.