French dairy company Danone SA said Monday it entered a binding agreement to sell its U.S. dairy business, Stonyfield, to Lactalis for $875 million to address U.S. competition concerns.
The sale of Stonyfield is part of an agreement reached with the U.S. Department of Justice in connection with Danone's recent acquisition of WhiteWave. Danone and WhiteWave together have big chunks of the yogurt market with brands including Dannon, Oikos, Actimel, Silk, Wallaby and Horizon Organic, which led to concerns from the Justice Department about concentration in the dairy sector.
Lactalis is a family-owned company whose cheese, milk and other dairy products are sold under such well-known brands, as President and Bridel. It said it has 75,000 employees spread across 85 countries.
Founded in 1983, Stonyfield, which was one of the pioneers in tapping consumers' growing desire for simpler, more natural products, has grown to have yearly revenue of around $370 million last year. Danone purchased a 40% stake in the company in 2001, and raised its share to 80% in 2004, which strengthened its position in the U.S. against Minneapolis-based competitor General Mills Inc., maker of Yoplait yogurt. Since 2014, Danone has fully owned Stoneyfield.
Closing of the sale of Stonyfield is subject to final approval by the Justice Department and is expected in the third quarter of this year. Danone's $10.4 billion purchase of WhiteWave, agreed in July 2016, closed on April 12 this year.
Write to Nick Kostov at Nick.Kostov@wsj.com
(END) Dow Jones Newswires
July 03, 2017 03:09 ET (07:09 GMT)