Danone to Sell Stonyfield Brand to Win U.S. OK for WhiteWave

(Bloomberg) -- Danone agreed to sell the Stonyfield organic yogurt brand to win approval from U.S. antitrust authorities for its $10 billion acquisition of soy-milk maker WhiteWave Foods Co.

Danone and the U.S. Justice Department's antitrust division reached an agreement in principle that will allow the WhiteWave deal to close shortly, the Paris-based company said in a statement Friday. As part of the accord, Danone will sell Stonyfield in the months after the acquisition is completed, the company said.

The divestment “is not the best case,” but will only cut earnings per share by 0.4 percent next year, Pierre Tegner, an analyst at Natixis, wrote in a report. A sale may value Stonyfield at 871 million euros including net debt, he wrote.

Stonyfield, founded in 1983, was a pioneer in tapping into rising U.S. demand for organic foods. Danone took a stake in the Londonderry, New Hampshire-based company in 2001 and bought control in 2004. The brand had sales of about $370 million last year.

Selling Stonyfield won't change the expected financial benefits of the WhiteWave acquisition, Danone said. Those include adding 0.5 percent to 1 percent to the French company's full-year like-for-like sales growth.

The move “allows us to take a major step towards completing the WhiteWave transaction expeditiously,” Danone Chief Executive Officer Emmanuel Faber said in the statement. “This is a good outcome as it addresses the DOJ's concerns and enables Danone to shortly begin to capture the benefits of the combination, and the value creation announced last July.”

Danone shares fell 0.6 percent to 63.19 euros at 9:18 a.m. in Paris.

With the purchase of Denver-based WhiteWave, announced July 7, Danone is aiming to kickstart growth amid a drop in dairy consumption. Besides soy milk, the company sells protein shakes and kale, among other products.

To contact the reporter on this story: Phil Serafino in Paris at pserafino@bloomberg.net.

To contact the editors responsible for this story: Benedikt Kammel at bkammel@bloomberg.net, Paul Jarvis, Eric Pfanner