DANONE to buy White Wave Foods

France’s DANONE, the world’s largest yogurt maker, said on Thursday July 7, 2016 it would buy White Wave Foods Co in a deal that values the U.S. organic foods producer at $12.5 billion, including debt.
White Wave has a market capitalisation of $8.3 billion.
The deal would boost DANONE’s pursuit of affluent consumers by adding White Wave’s popular health food offerings such as Silk almond milk and Earthbound Farm Organic salad to its portfolio, as it struggles with setbacks in more challenging markets such as Brazil and Russia.
DANONE, which makes Oikos Greek-style yogurt and Evian water, is targeting sales growth of more than 5 percent by 2020, with half of its business keying in on consumers seeking healthy-eating alternatives. North American sales will be 22 percent of DANONE’s total revenue after the purchase, compared with 12 percent now.
The purchase values White Wave at $12.5 billion including net debt and other liabilities. The deal would be DANONE’s largest in a decade and the first major transaction by Emmanuel Faber, the company veteran.
DANONE, once the darling of growth investors, has struggled in recent years to drive growth, grappling with headwinds in emerging markets as well as in Europe due to volatile economic conditions.
The finalization of this acquisition would turn out to be one of the significant merger’s in the history of DANONE group.
BY: DEVIKA SHARMA