U.S. dairy business to be sold by french food group
U.S. dairy business Stonyfield will be sold to Lactalis by the French food group Danone in order to address competition concerns.
An report by Reuters pointed out that the concerns stemmed from an acquisition of the organic food group WhiteWave and that earlier this year, Danone said it would "sell Stonyfield as part of an agreement with U.S. authorities to facilitate its takeover of WhiteWave."
Stonyfield had a around $370 in turnover in 2016 according to the article and will be sold for $875 million. The sale price represents a multiple of around 20 times the 2016 earnings before interest, tax, depreciation and amortization Reuters stated.
"The sale price appears reasonable and we expect proceeds would reduce leverage largely offsetting dilution from the disposal," Liberum analysts wrote in a research note.
"Danone remains on track to deliver 10 percent 5-year CAGR (compound annual growth rate) driven in part by WhiteWave and significant savings from the 1 billion euros Project Protein efficiency program," they added.
The deal is expected to be completed in the third quarter of 2017.