SUBSCRIBE

Breaking News on Dairy Processing & Markets

News > Manufacturers

Read more breaking news

 

 

Lactalis buying Stonyfield from Danone for $875m

Post a comment

By Jim Cornall+

03-Jul-2017
Last updated on 03-Jul-2017 at 21:51 GMT2017-07-03T21:51:06Z

As required as part of the deal to complete the acquisition of WhiteWave, Danone is selling Stonyfield to Lactalis.
As required as part of the deal to complete the acquisition of WhiteWave, Danone is selling Stonyfield to Lactalis.

French dairy company Danone has entered into a binding agreement with fellow-French company Lactalis to sell Stonyfield, one of its US dairy subsidiaries, for a purchase price of $875m.

The amount, according to Danone, represents 20 times its EBITDA in 2016; Stonyfield generated approximately $370m in turnover in 2016.

According to data from market research provider Euromonitor International, Stonyfield is the second largest brand for organic dairy-based yogurt in North America with 13.3% of the market. Although its brand shares decreased in 2016, the brand registered 3.5% value sales growth in 2015-2016.

The divestiture is part of the agreement reached on March 31, 2017 with the US Department of Justice (DOJ) in connection with Danone’s recently-closed acquisition of WhiteWave.

Danone’s estimated $12bn deal to take over WhiteWave was finalized in April 2017  after having been announced in July 2016.

Closing expected third quarter 2017

The closing of the divestiture is subject to customary conditions, including final approval by the DOJ, and is expected in the third quarter of this year.

Stonyfield, based in Londonderry, NH, has been producing organic yogurt, milk and cream since 1983. Danone bought a 40% stake in the company in 2001, and has owned the company since 2014.

Other global companies owned or controlled by Lactalis include Italy’s Galbani and Parmalat, Croatian company Dukat, Slovenian company Ljubljanske Mlekarne, Australia’s Harvey Fresh and Tirumala in India.

Euromonitor International analysis

Lianne van den Bos, senior food analyst at Euromonitor International added acquisition has been the driving force behind Lactalis’ expansion and, particularly, its efforts to reduce its reliance on the French market. 

Latin America has been a key focus for Lactalis’ acquisitive expansion, with this region the largest contributor to dairy growth, behind Asia Pacific, she said.

"In addition, the company has made acquisitions in Australia for a production foothold in the Australasian region. Strategically this could be the pathway to future supply to China, as seen with Fonterra. 

“Yogurt sales for Lactalis currently only represent 10% of the company’s sales, while yogurt will represent over a quarter of forecast global dairy value sales."

She noted the acquisition of Parmalat significantly enhanced the company's standing in yogurt, strengthening its position in the Italian market as well as in South Africa and Venezuela.

"Lactalis however will need to expand the brand into other markets in those regions or risk creating “orphan brands” that absorb disproportionate marketing and distribution costs," van den Bos said.

Asia Pacific currently only accounts for 3% of Lactalis’s yogurt sales, she said, while the majority of forecast value sales will come from this region.

"Lactalis therefore should look at future expansion in the region. Unsurprisingly of the top global yogurt players, the most growth in terms of market share is coming from companies that have a strong focus on Asia Pacific.”

Post a comment

Comment title *
Your comment *
Your name *
Your email *

We will not publish your email on the site

I agree to Terms and Conditions

These comments have not been moderated. You are encouraged to participate with comments that are relevant to our news stories. You should not post comments that are abusive, threatening, defamatory, misleading or invasive of privacy. For the full terms and conditions for commenting see clause 7 of our Terms and Conditions ‘Participating in Online Communities’. These terms may be updated from time to time, so please read them before posting a comment. Any comment that violates these terms may be removed in its entirety as we do not edit comments. If you wish to complain about a comment please use the "REPORT ABUSE" button or contact the editors.

Key Industry Events

 

Access all events listing

Our events, Shows & Conferences...