US dairy processor Dean Foods is set to acquire the 87 per cent share of Horizon Organic that it does not already own for $216 million (€186.9m). The company's strategy is to expand its organic food product line.
The transaction, which was approved by the board of directors of both companies, is expected to close during the fourth quarter of 2003. The deal however is subject to approval by Horizon Organic's shareholders.
Horizon Organic is the leading brand of certified organic milk in both the United States and the United Kingdom. In 2002, Horizon Organic reported revenues of approximately $187 million, and in April 2003, the company announced that it had reached a milestone of $200 million in annual sales.
Horizon Organic's product line in the United States includes organic milk, a full line of organic dairy products and organic juices. In the UK, the company markets and sells organic milk, yoghurt and butter under the Rachel's Organic brand.
"We are extremely pleased to add the number one organic milk and dairy brand to our portfolio of branded products," said Gregg Engles, chairman and CEO of Dean Foods.
"Our acquisition of Horizon Organic evidences our commitment to the growth of healthy, better-for-you products. We are also very excited to have the opportunity to join forces with the Horizon Organic management team and continue to build upon their passion and commitment to organic foods."
Chuck Marcy, president and CEO of Horizon Organic said: "We are especially excited to leverage Dean Foods' unique national refrigerated distribution system, to expand the distribution of Horizon Organic branded milk, dairy and juice products.
"This will allow us to further support and encourage greater organic milk and organic crop production. We are confident that this combination is the best way to ensure the future growth and extension of both the Horizon Organic and Rachel's Organic brands."
Dean Foods produces a full line of company-branded and private label dairy products such as milk and milk-based beverages, ice cream, coffee creamers, cream, cottage cheese and yoghurt. The company operates over 120 plants in the US and Spain, and employs approximately 28,000 people.