Danone Sells Horizon Organic, Wallaby U.S. Businesses to Platinum Equity -- Update
02 January 2024 - 9:32PM
Dow Jones News
By Adria Calatayud and Helena Smolak
Danone will sell its Horizon Organic and Wallaby organic-dairy
businesses in the U.S. to investment firm Platinum Equity for an
undisclosed sum, pruning its portfolio in a bid to boost sales
growth and profitability.
The French producer of yoghurts, bottled water and
infant-nutrition products said Tuesday that the deal is part of a
portfolio review launched in 2022 shortly after Antoine de
Saint-Affrique became chief executive.
Danone acquired the Horizon Organic and Wallaby brands as part
of its $10.4 billion deal for U.S. organic-foods producer WhiteWave
Foods, which was completed in 2017.
In January last year, the company said it was considering a
potential sale of its underperforming product portfolio, including
its organic dairy activity in the U.S.
The brands--which include dairy products such as creamers &
whiteners, cheese, and butter in addition to milk and
yogurt--represented about 3% of the Danone's global revenue and had
a dilutive impact on its like-for-like sales growth and recurring
operating margin, it said. The maker of Activia yogurt and Evian
water reported global sales of 27.66 billion euros ($30.56 billion)
in 2022.
"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," Danone's CEO said.
The company added that it would retain a minority stake that
won't be consolidated into its results after completing the sale,
which remains subject to customary conditions.
Platinum Equity said separately that the brands will benefit
from its carve-out experience and operational expertise. Its
portfolio includes cookie maker Biscuit International, wine
producer Fantini Group Vini and seafood provider Iberconsa.
Growth in the dairy-milk category is being driven by premium
offerings such as organic and value-added products with Horizon
Organic being a pioneer in this segment, Platinum Equity Managing
Director Adam Cooper said.
Write to Adria Calatayud at adria.calatayud@dowjones.com and
Helena Smolak at helena.smolak@wsj.com
(END) Dow Jones Newswires
January 02, 2024 05:17 ET (10:17 GMT)
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