Danone to Acquire WhiteWave Foods for $12.5 Billion

Danone, a global food and beverage conglomerate whose brand portfolio includes evian and Dannon yogurt, has agreed to acquire WhiteWave Foods, a manufacturer of plant-based and premium dairy products. Danone will acquire WhiteWave, which owns Silk, Horizon Organic and International Delight, among other brands, for $56.25 per share in an all-cash transaction, representing a total enterprise value of approximately $12.5 billion, including debt and certain other WhiteWave liabilities, according to a release issued by the two companies.

The deal will nearly double the size of Danone’s North America footprint, increasing it from 12 to 22 percent of the company’s total portfolio and align it with several fast-growing brands focused on healthy and sustainable lifestyles. The acquisition of WhiteWave will also make Danone a leading manufacturer of refrigerated products in the U.S. and one of the 15 largest food and beverage manufacturers in the country.

Amid sustained demand for organic, plant-based and dairy-alternative foods and beverages, WhiteWave sales have increased at a 19 percent compound annual growth rate from 2012 to 2015, and the company doubled its operating income during the period. WhiteWave reported a net profit of $168 million on revenue of $3.9 billion in 2015, according to The Wall Street Journal.


“This unique combination positions us better to address tomorrow’s consumer trends and represents a great opportunity to step change the ambition of our plan for an Alimentation revolution and to accelerate our path towards strong sustainable and profitable growth by 2020.” Danone CEO Emmanuel Faber said in the release.

Since being spun off Dean Foods in 2012, WhiteWave has made several key acquisitions and investments to bolster its portfolio with brands in high-growth categories. In January, 2014, the company bought organic produce grower Earthbound Farm for $600 million, and eight months later paid $195 million for So Delicious, a maker of plant-based food and beverages. In January, 2015, WhiteWave made a $3 million investment in cold-pressed juice brand Daily Greens and later that year acquired Vega, which manufactures nutritional plant-based powder and snack bars, for $550 million. The company has also innovated internally, and recently entered the surging cold-brew coffee category with the launch of STōK, a new brand of RTD iced coffees.

While it remains to be seen if Danone will embrace WhiteWave’s acquisition strategy, Mike Burgmaier, a managing director and co-founder at Whipstitch Capital, an investment bank focused on the consumer products industry, believes that it should be critical part of the company’s vision going forward.

“My hope is that Danone recognizes how WhiteWave was built through acquiring fast-growth, emerging brands that are typically smaller than what Danone would buy on their own,” Burgmaier said. “And that they’re buying a mindset and an experience base about how you grow a company, identify trends and act on [them]. My hope is that Danone is going to continue that and continue it in a much bigger way. But time will tell what they choose to do, how they integrate it, and what the mindset is.‎”

WhiteWave Chairman and CEO Gregg Engles will have his say in that mindset; he’ll join Danone’s Board of Directors following completion of the sale. Plans to integrate the two companies have yet to be revealed, however, Engles called Danone “a great cultural fit for our organization and I am excited for our employees to benefit from the opportunities presented by joining” the company.

Analyst reaction to the deal was mostly positive, however, some wondered about the future prospects for WhiteWave’s brands.

“The key question to our mind is the real strength of the WhiteWave brands,” Jeff Stent, an analyst at Exane BNP Paribas, told Bloomberg. “To what extent has WhiteWave’s success been less about the brands and more about first-mover advantage in a high-growth category. Time will tell.”

Meanwhile, Greg Steltenpohl, the CEO of plant-based beverage company Califia Farms — which competes with WhiteWave in several categories — called the deal one that “further validates the growing importance of the alternative dairy/plant-based food and beverage space for large global food companies.”

“While Califia Farms has chosen more of a premium and artisanal approach, we see Danone’s recognition of plant-based milks’ importance to WhiteWave’s broader portfolio of fluid dairy brands as consistent with the huge growth Califia Farms has experienced over the past three years. There’s no question that CEO Gregg Engles has been very prescient in picking categories.”