France's Danone to sell Stonyfield to Lactalis for $875 million
PARIS French food group Danone (DANO.PA) has agreed to sell its U.S dairy business Stonyfield to Lactalis for $875 million, a move designed to address competition concerns stemming from its acquisition of U.S. organic food group WhiteWave.
Danone said on Monday that Stonyfield had around $370 million in turnover in 2016, and that the sale price represented a multiple of around 20 times the 2016 earnings before interest, tax, depreciation and amortization (EBITDA) for Stonyfield.
Danone shares were up 1 percent in mid-session trading, in line with a similar rise on the CAC-40 index of French blue chips stocks. .FCHI
“The sale price appears reasonable and we expect proceeds would reduce leverage largely offsetting dilution from the disposal,” Liberum analysts wrote in a research note.
“Danone remains on track to deliver 10 percent 5-year CAGR (compound annual growth rate) driven in part by WhiteWave and significant savings from the 1 billion euros Project Protein efficiency program,” they added.
Danone’s ‘Project Protein’ savings program, unveiled earlier this year, aims to cut costs by 1 billion euros over the next three years.
Jefferies analysts added that the Stonyfield sale was “a decent exit and the removal of a potential distraction for Danone.”
Earlier this year, Danone had said it would sell Stonyfield as part of an agreement with U.S. authorities to facilitate its takeover of WhiteWave.
The deal is expected to be completed in the third quarter of 2017.
(Additional reporting by Sudip Kar-Gupta; Editing by Himani Sarkar/Sudip Kar-Gupta)