French dairy conglomerate Danone has offloaded its US-based Horizon Organic and Wallaby units to the local investment firm Platinum Equity for an undisclosed sum.
The owner of the Alpro and Activia brands said that the disposal is part of its Renew Danone turnaround strategy, announced in March 2022. The strategy includes the disposal of what CEO Antoine de Saint-Affrique described at the time as “under-performers.”
Announcing the deal today, Danone mentioned that the organic dairy units make up approximately 3% of its global revenues. The company plans to retain a minority stake in the business.
De Saint-Affrique said, “As part of our Renew Danone strategy, we committed to a portfolio review and asset rotation for businesses that fell outside our priority growth areas of focus to drive value creation.
“Today marks an important milestone in delivering this commitment, while giving the Horizon Organic and Wallaby businesses the opportunity to thrive under new leadership.
“This sale, once completed, will allow us to concentrate further on our current portfolio of strong, health-focused brands and reinvest in our growth priorities.”
The Colorado-based organic units, specializing in the production of milk, yogurt, creamers, butter, and cheese, were initially considered for sale around this time last year. Danone stated that these units had a “dilutive” impact on sales growth and were undergoing strategic review.
De Saint-Affrique said at the time, “Both Horizon Organic and Wallaby are strong, much-loved brands with compelling growth opportunities. That said, seen through the lens of our renew strategy, which requires us to stay disciplined in how we allocate our resources, they fall outside our priority growth areas of focus.”
Danone acquired the Horizon Organic unit as part of its $12.5 billion acquisition of the US group WhiteWave Foods in July 2016. This deal effectively doubled its size in the US market.
In October, Danone increased its revenue guidance for 2023, citing the success of the Renew turnaround strategy.
Danone’s Future Plans and Portfolio Optimization:
The company stated that it anticipates like-for-like sales growth to reach 6-7% this year, a revision from the earlier estimate of 4-6%.
De Saint-Affrique said at the time, “Eighteen months after the launch of Renew Danone, the benefits of our strategy are starting to show. This quarter is the seventh consecutive quarter of delivery, with sales up 6.2% on a like-for-like basis.”
Danone reported a three-month revenue of €6.9 billion (then $7.3 billion) following a 6.2% increase in third-quarter like-for-like sales. This surpassed the analyst consensus, which had anticipated a 4.7% rise.
In December, Danone disclosed discussions about the potential sale of its French baked goods business, Michel et Augustin, to the Belgian holding company CTH Invest, which is associated with Ferrero.
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