French dairy giant Danone has agreed to acquire American nondairy giant WhiteWave Foods Co. in an all-cash transaction valued at $12.5 billion. The deal already has been unanimously approved by both companies' boards of directors, although it still must be voted on by WhiteWave’s shareholders and receive regulatory approvals.
WhiteWave, Food Processing's 2014 Processor of the Year (see story), generated $4 billion in sales in 2015 and has a portfolio of leading brands in North America and Europe and is just starting up a joint venture in China. Its leading products are plant-based alternatives to dairy products – Silk soymilk chief among them – but it also owns Horizon, the leading organic milk brand, and International Delight coffee creamers, and in 2014 bought Earthbound Farm, marketer of packaged organic produce.
In the yogurt category, where Danone is the global leader, WhiteWave brings Wallaby Greek-style (actually Australian-style) organic yogurt and, in Europe, Alpro plant-based yogurt. In 2014 it struck a joint venture with China Mengniu Dairy Co. to manufacture and market plant-based dairy-replacement products in that country, but there have been delays in getting that operation up and running.
In addition to its namesake yogurts (Dannon here in the States), Danone also owns Stonyfield Farm.
Gregg Engles, WhiteWave's chairman and CEO, will get a seat on Danone's board of directors. There was no mention of other current WhiteWave executives.
WhiteWave's predecessor companies have roots that go back to 1977, but WhiteWave was just incorporated in 2012 as it was spun off from Dean Foods – which Engles somewhat created in a reverse-acquisition.
Danone's offering price of $56.25 for each WhiteWave share represents a 24 percent premium over the American company's 30-day average closing trading price of $45.43. The transaction is expected to close by the end of the year.
Following the closing of the transaction, Danone and WhiteWave expect to combine their U.S. activities into a Public Benefit Corporation. "This commitment is in line with Danone’s long-term mission for building economic and social value," the French company said. Danone and WhiteWave will establish a team to prepare for and to oversee the transition of the businesses.