French dairy giant Danone said on Thursday it would buy WhiteWave Foods Co in a deal that values the U.S. organic foods producer at $12.5 billion, including debt.
Danone said it was offering $56.25 per share in cash in a deal that would double its U.S. business and was its largest acquisition since the purchase of Dutch group Numico in 2007.
The deal will boost the French company’s pursuit of affluent consumers by adding WhiteWave’s popular health food offerings such as Silk almond milk and Earthbound Farm Organic salad to its portfolio, as it struggles with setbacks in more challenging markets such as Brazil and Russia.
It is the first major transaction by Emmanuel Faber who took over as Danone’s chief executive in 2014.
The deal, which will be 100 percent debt financed and will boost earnings per share from the first year after closing, was approved by the boards of both companies.
It represents a premium of 24 percent over WhiteWave’s 30-day average closing trading price, Danone said in a statement said.
“This transaction will create a leading U.S. refrigerated dairy payer, as well as one of the top 15 largest U.S. Food and Beverage manufacturers,” it said.
After the deal, which is expected to close by year-end Danone’s North America footprint will increase to 22 percent of Danone’s total portfolio from 12 percent.
Danone CEO Emmanuel Faber said the deal “positions us better to address tomorrow’s consumer trends… and to accelerate our path towards strong sustainable and profitable growth by 2020.”