Danone is selling one of its US dairy subsidiaries to hasten the closure of its $12.5bn acquisition of WhiteWave, a US maker of high-end natural and health-focused foods.
The world’s largest yoghurt maker said on Friday that it has reached an agreement with the US Department of Justice on its WhiteWave transaction, which involves selling its Stonyfield dairy subsidiary in the months after the WhiteWave acquisition closes.
Stonyfield recorded around $370m in revenues in 2016.
The company said in a statement that selling Stonyfield “is expected to permit closing to occur shortly.”
For Danone, which last month unveiled plans for €1bn of cost cuts by 2020 to address a squeeze from higher milk prices and ‘volatile’ economic conditions, the WhiteWave acquisition – its largest in a decade – will help it tap into consumer demands for healthier eating.
Once it is completed, Danone will become the world’s biggest producer of organic food and it hopes to increase its like-for-like sales growth by an extra 0.5-1 per cent a year.
Emmanuel Faber, chief executive of Danone, said in a statement:
Through the WhiteWave acquisition [...] Danone will notably double the size of its North American business to more than $6bn in turnover, allowing the company to become a top 15 food and beverage company in the US and the number one in refrigerated dairy (excluding cheese) in this key strategic geography.