Danone to acquire another food group WhiteWave
United
States: The largest producer of yogurt Danone will
pay USD56.25 per share in the deal, which is 24% above the WhiteWave’s average
stock overs the past month including debt & liabilities. This deal is
poised to increase the size of the company in terms of share & the products
because of the popularity of healthy foods offered by WhiteWave such as Silk almond milk, Earthbound Farm Organic
salad. The recent performance of Danone has slowed down in emerging markets
including Brazil and Russia. The acquisition of WhiteWave would account for 22%
revenue to increase by 12% for better competition with nestle in North America.
WhiteWave’s
19% increase in share have started to attract higher offers this is due to
packaged food industry are now under pressure because of the growth in organic
food industry. WhiteWave’s product portfolio has outperformed packaged foods
and focusing on the consumer shift healthy lifestyles and natural foods.
According to TechSci Research, the US Organic Food industry has largest
of profits adding USD4.2billion in sales from previous year. U.S is the top
organic hub, and with their relation to other local economies have been
benefitted visa-versa. This steady increase in organic sector has led to
increase in average household income in the United States by over USD2,000 and
lowering the poverty rate. The acquisition of whitewave by Danone would make the
company one of the biggest U.S. refrigerated dairy player, as well as one of
the top 15 largest U.S. food and beverage manufacturers.
According to recent report published by TechSci Research “United States Organic Foods Market Forecast &
Opportunities, 2020”, the market for organic food products in the US is
projected to cross USD45 billion in 2015. Organic fruits and vegetables segment
holds the largest market share, with demand driven by retail consumers, hotel
chains as well as restaurants. The market is likely to witness continuous
growth in the coming years due to implementation of more stringent
environmental protection policies and animal welfare programs by the US
government. Major players engaged in offering organic foods in the country
include Hain Celestial, Amy’s Kitchen and WhiteWaves Food Inc.