Danone Sells Horizon Organic & Wallaby to Boost Health-Focused Portfolio

Summary

  • Danone announces the sale of its Horizon Organic and Wallaby businesses as part of its portfolio review and asset rotation plan initiated in March 2022. No financial details of the deal were disclosed.
  • The goal of the sale is to allow Danone to focus more on their health-focused brands.
  • Danone retains a minority stake in the venture but declined to comment on the deal’s value.
  • The Paris-based company mentioned a potential sale of its organic dairy activity in the U.S. in early 2021, inclusive of Horizon Organic and Wallaby brands.
  • These businesses, offering a range of organic dairy products, constituted roughly 3% of Danone’s global revenues and affected Danone’s sales growth and recurring operating margin in 2022.

Danone Portfolio Revision and Potential Impact

Danone’s planned sale of its Horizon Organic and Wallaby businesses is a stratagem stemming from its portfolio revision and asset rotation program that the company disclosed in March 2022. The financial aspects of the agreement have not been revealed, the organization declared.

“This divestiture, once finalized, will facilitate our enhanced focus on our robust health-centric brands and re-channel investments into our growth targets,” articulated Danone CEO Antoine de Saint-Affrique.

Danone will sustain a minority stake in the enterprise, the firm further noted.

Projected Financial Impact for Danone

The company refrained from commenting on the valuation of the transaction, but stated that it would influence its 2024 financial performance.

In January of the previous year, the Paris-based corporation indicated that it was evaluating strategic alternatives, including a potential sale, for its organic dairy segment in the U.S.

Composition of Danone’s Organic Dairy Business

The organic dairy operations of Danone in the U.S. consist of the Horizon Organic and Wallaby businesses. These businesses offer a variety of organic dairy products, including milk, creamers, yogurt, cheese, and butter.

These operations constitute about 3% of Danone’s global revenues and had a dilutive effect on Danone’s like-for-like sales growth and its recurring operating margin last year.

In conclusion, this strategic maneuver by Danone could potentially alter the landscape of the organic dairy market, and might have knock-on effects on trading activities within the dairy commodities sector.

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