The European Commission past Friday cleared France’s Danone to proceed with its $10.4 billion purchase of U.S. organic food producer WhiteWave, subject to it selling a business in Belgium.
Danone will sell a large part of its ”growing-up milk” business in Belgium, as the Commission said only Nestle would have remained as a competitor in the country otherwise.
Danone will acquire WhiteWave for approximately USD 12.5 billion.
WhiteWave, which generated USD 4 billion in sales in 2015 and whose portfolio includes leading brands in the Premium Organic Dairy, non-GMO, Plant-based alternatives to milk & yogurt, Fresh Foods, and Coffee Creamers categories, represents a key opportunity for further growth for Danone and enable the French firm to build a stronger North American presence.
Together, WhiteWave and Danone plan to create an industry leader strongly aligned with consumer trends for healthier and sustainable eating and drinking options. The transaction is expected to result in approximately USD 300 million of EBIT synergies by 2020.
US leading yogurt maker, Dannon – a subsidiary to French Danone, announces a pledge to its farmers, retail customers and consumers to further improve sustainable agriculture practices for its milk supply, to increase transparency for its portfolio of products and evolve to more natural and fewer ingredients for flagship brands.
Dannon commits to offer products coming from a more sustainable agriculture by working with its dairy farmer partners and their suppliers to progressively implement the use of sustainable agriculture practices and technology that leads to better soil health, better water management, an increase in biodiversity, and a decrease in carbon emission.
Dannon commits to bring all products from three flagship brands (Dannon®, Oikos® and Danimals®) towards the use of fewer and more natural ingredients that are not synthetic and non-GMO. Importantly, Dannon also commits that for these brands the feed of its farmers’ cows will be non-GMO, within a transition period of 3 years. The ambition is to evolve the remaining brands over time.
The Fresh Dairy Products division reported sales up +2.6% like-for-like, buoyed as anticipated by renewed growth in North America. Growth includes a slight -0.6% decline in volumes and a steep +3.2% rise in value.
Business in the CIS & North America area picked up markedly: In the United States, growth gathered pace over the quarter, driven by targeted investments backing brands and by the category’s return to growth. In Russia, with consumer demand sluggish, Danone continued to enhance the portfolio through higher prices and a positive mix effect, once again offsetting the significant decline in volumes in low valueadded segments.
In Europe, the division pursued a concerted effort to gradually steer its business back to profitable structural growth. Fourth-quarter trends are largely in line with those observed in the third quarter of the year. This includes, in particular, the sequential improvement in volumes, supported by the favorable basis of comparison signaling the end of PRGM (Profitable Revenue Growth Management).
The ALMA region reported a marked rise in sales reflecting contrasting performances in emerging countries, with positive results in Argentina, Mexico and Japan, and a slowdown in Brazil in a very volatile economy.
Danone is to end production at two of its dairy factories in Russia during the first quarter of the year. The facilities are based in Cheboksary, a city on the Volga river 650km east of Moscow, and in Tomsk, a city in Siberia, 260km north of Novosibirsk.
The end of production in Cheboksary and Tomsk will affect around 300 staff.
Following the preliminary agreement with Yashili and Mengniu this summer, Danone announces the execution of a final sale agreement of Dumex in China to Yashili, for a total €150 million.
By bringing the Dumex and Yashili brands closer together, the operation will build a strong local infant milk formula (IMF) brand platform.
Danone announces that it is investing €240 million to build a new plant for its Early Life Nutrition business. With this investment, Danone will capitalize on strong and growing demand for its international early life nutrition brands, including Aptamil and Nutrilon, for both standard and specialized products. The state-of-the-art facility will be built in Cuijk in the Netherlands, and will start production in late 2017.
This new plant is Danone’s largest investment in its European production capabilities, and will double its capacity in the Netherlands. Output will be exported to more than 80 countries worldwide.