Danone SA has announced its purchase of U.S. organic foods producer WhiteWave Foods for $10.4 billion, making it the French dairy company’s largest acquisition in a decade. WhiteWave brands include Horizon organic milk, Silk nondairy milks, and Earthbound Farm packaged salads will now join Danone’s product line.
“The purchase will allow us to double the size of our U.S. business and become the world leader in organic,” Danone Chief Executive Emmanuel Faber told Bloomberg. “I am convinced Danone is uniquely positioned to continue WhiteWave’s development.”
This announcement marks the first major transaction made by Faber since he took the post in 2014. When he assumed the position, he vowed to return Danone to strong, sustainable growth by 2020, a promise that he first addressed by attempting to revive sluggish sales in Europe in 2015.
This deal will allow the brand to include a range of faster-growing organic items, which continue to gain popularity in the U.S. and worldwide. In 2015, organic dairy was the second largest organic food category in America, according to the Organic Trade Association, with $6 billion in sales. Organic dairy accounted for 15 percent of total organic sales.
Denver-based WhiteWave Foods has been one of the fastest-growing organic food companies in recent years, with a net profit of $168 million on revenue of $3.9 billion in 2015. WhiteWave was a subsidiary of Dean Foods until it was spun off in 2012. The company is actively involved in sustainability initiatives within its own operations.
“Packaged food is under pressure but what you’re getting is this high-end food product which is not in the discount end of the market,” Jon Cox, analyst at Kepler Cheuvreux, told the Wall Street Journal. “That market is growing very quickly in North America and globally.”
The acquisition deal was made unanimously on Wednesday and is expected to close by the end of the year.
Danone's product line already includes Stonyfield organic yogurt, which it purchased in 2001 and is currently the best-selling organic yogurt in the U.S. and the third best-selling yogurt overall. Danone also produces Dannon Light & Fit yogurt, Oikos Greek yogurt, and Activia yogurt.
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Image care of WhiteWave Foods