Danone To Buy WhiteWave Foods In $12.5 Bln Deal, Shares Up

(RTTNews) - Danone SA's (DANOY) shares were trading around 6 percent higher in the morning trading after the French dairy giant revealed an agreement to buy US-based WhiteWave Foods Co. (WWAV) for $56.25 per share in an all-cash transaction. The total enterprise value of the deal would be approximately $12.5 billion, including debt and certain other WhiteWave liabilities. WhiteWave shares are gaining around 18 percent in the pre -market activity.

Danone expects the transaction to be solidly accretive to its earnings within the first year after closing and to be above 10 percent accretion based on expected run-rate synergies. The transaction is expected to result in approximately $300 million of EBIT synergies by 2020.

The transaction has been unanimously approved by the Board of Directors of both companies. The per share price in the deal represents a premium of approximately 24 percent over WhiteWave's 30-day average closing trading price of $45.43.

The acquisition doubles the size of Danone's US business, and significantly enhances Danone 2020 plan, and immediately accelerates its journey towards strong sustainable and profitable growth by 2020, the company noted.

WhiteWave, a provider of organic foods, plant-based alternatives to milk & yogurt, and related products, generated $4 billion in sales in 2015. Its bands include Silk, So Delicious, Vega, Alpro, Provamel, Horizon Organic, Wallaby Organic, Earthbound Farm and International Delight. Since becoming a public company in 2012, the company's sales have increased at a 19 percent compound annual growth rate through 2015, and has also doubled its operating income during this period.

After the deal closing, Danone will submit to its shareholders a resolution appointing WhiteWave Chairman and Chief Executive Officer Gregg Engles to the Danone Board of Directors.

The transaction is expected to close by the end of the year. It is subject to WhiteWave shareholders approval, receipt of required regulatory approvals, including in the European Union and the United States and other customary closing conditions.

The acquisition of WhiteWave is expected to be fully financed with debt for which Danone has received commitments from its bank.

Franck Riboud, Danone Chairman said, "We believe WhiteWave's size, positioning and geographical footprint fit perfectly with Danone's strategy and that it is the right transaction at the right time."

Following the closing of the deal, both companies expect to combine their U.S. activities into a Public Benefit Corporation, which is in line with Danone's long term mission for building economic and social value.

Danone and WhiteWave will establish a team to prepare for and to oversee the transition of the businesses. Danone also said it expects to maintain a strong investment grade rating.

In Paris, Danone shares were trading at 67.16 euros, up 6.08 percent.

On the NYSE, WhiteWave shares were gaining 18.28 percent in the pre-market activity at $56.10.