Danone has signed an agreement to sell its US dairy businesses Horizon Organic and Wallaby Organic to US investment firm Platinum Equity. The closing of the transaction is subject to customary conditions, with Danone set to retain a non-consolidated minority stake in the business.
Horizon Organic and Wallaby represent around 3% of Danone’s global revenues. In 2022, the brands had a dilutive impact on the dairy major’s like-for-like sales growth and recurring operating margin, leading to CEO Antoine de Saint-Affrique to conclude that they ‘fall outside our priority growth areas of focus’.
Horizon Organic is the largest organic dairy brand in North America, with a portfolio of milk, creamers and whiteners, yogurt, cheese, and butter. Wallaby is an Australian-inspired brand of organic yogurt.
Danone CEO Antoine de Saint-Affrique said: “As part of our Renew Danone strategy, we committed to a portfolio review and asset rotation for businesses that fell outside our priority growth areas of focus to drive value creation. Today marks an important milestone in delivering this commitment while giving the Horizon. Organic and Wallaby businesses the opportunity to thrive under new leadership. This sale, once completed, will allow us to concentrate further on our current portfolio of strong, health-focused brands and reinvest in our growth priorities.”
California-headquartered Platinum Equity has a portfolio of around 50 companies across 9 industries, from consumer and retail to technology and healthcare. The firm recently announced the pending acquisition of Kohler Energy from Kohler Co. and has also acquired businesses from firms like Ball Corporation, Caterpillar, ConAgra, Emerson Electric, Ingersoll Rand and Johnson & Johnson.
The investment firm estimates that the US dairy category is worth $68bn, with milk comprising approximately $17bn of that total.
Platinum Equity co-president Louis Samson commented: “Horizon Organic is an iconic name in dairy that is well recognized and beloved by consumers. The brand has earned a reputation for quality and innovation that is unmatched in the industry. We appreciate Danone's confidence in our ability to build on that legacy and support Horizon Organic's growth as a standalone company.”
Company MD Adam Cooper said that premium offerings including organic products were driving the growth in the dairy milk segment, adding: “Horizon Organic is a pioneer of that segment and is in position to continue capitalizing on and accelerating the trend.”