Stonyfield Farm, the largest organic yogurt producer in the U.S. and Groupe DANONE (NYSE: DA), the France-based consumer products company known worldwide for its bottled water, fresh yogurt products and biscuits, announced today that Groupe DANONE has agreed to acquire an initial 40% holding in Stonyfield Farm. The full terms of the transaction were not disclosed. Under the agreement, Groupe DANONE will have an opportunity to acquire a majority holding in the company in 2004. However, control of Stonyfield’s management will remain with Gary Hirshberg, Stonyfield’s current chairman, president and chief executive officer.
For more than a decade Stonyfield Farm has had the fastest compound annual growth rate (CAGR) of any U.S. yogurt brand with a CAGR in excess of 20%. Last year, Stonyfield became the fourth largest yogurt brand in the U.S. Stonyfield has built a reputation in the U.S. for its leadership in organics, natural nutrition and corporate and environmental responsibility. Stonyfield is the number one brand in the U.S. natural yogurt segment with a turnover of about $85 million (100 million Euros).
Viewed as a long-term partnership by both companies, Stonyfield Farm will remain autonomously managed by Mr. Hirshberg. In 2004, Groupe DANONE will have the opportunity to acquire additional Stonyfield shares, giving DANONE majority ownership of Stonyfield and allowing it to fully consolidate Stonyfield’s financial results. Groupe DANONE will initially acquire Stonyfield’s shares from nearly 300 existing shareholders, including farmers, friends and family of Mr. Hirshberg’s. DANONE’s relationship with Stonyfield will be managed directly by Groupe DANONE’s senior executive vice president in charge of the worldwide Fresh Dairy Products division.
Franck Riboud, Groupe DANONE’s chairman and chief executive officer said, “Through this unique partnership, DANONE will build upon and expand Stonyfield’s leadership in the U.S. natural and organic yogurt segment as we provide pivotal assistance in terms of manufacturing, purchasing, logistics and other efficiencies. We want Stonyfield to leverage Groupe DANONE’s strengths while retaining its own unique culture and management. We believe it is important for Stonyfield to continue to grow its market share while maintaining its commitment to social responsibility. We applaud efforts such as Stonyfield’s ‘Profits for the Planet’ program, in which 10% of the prior year’s profits are donated to environmental causes.”
Gary Hirshberg, Stonyfield’s chairman, president and chief executive officer stated, “With this precedent-setting agreement, DANONE will have the opportunity to participate in the U.S. organic and natural dairy segment, which has enjoyed strong double-digit growth. Similarly, Stonyfield will benefit by partnering with a worldwide yogurt leader that has a track record of successful partnerships. I am especially pleased with DANONE’s commitment to our ambitious organic, environmental and social mission. The Stonyfield/DANONE partnership is an excellent model for enabling emerging values-driven firms to gain in strength and stature while remaining loyal to the growing base of consumers who support organic and natural products.”
This transaction is subject to the satisfaction of customary conditions, including receipt of U.S. antitrust authorities approval. Lazard LLC acted as financial advisor to Stonyfield Farm.
Compatible Missions: Environmental Responsibility
Stonyfield Farm has received numerous awards over the years for its waste reduction, energy efficiency, and environmental advocacy efforts. The company recycles most of its manufactured solid waste; invests in green packaging research and carbon offsets to neutralize its manufacturing plant’s contribution to global warming; uses its lids and packaging to promote environmental causes; donates 10% of its profits to environmental causes and has converted 70% of its products to organic certification.
DANONE has, for many years, contributed to the development of environmental regulation in France and Europe. The company continually explores environmental monitoring programs and innovation in greener packaging, integrated farming and energy efficiency. DANONE has also employed programs that have resulted in waste reduction and resource use, recycling and ISO certification in many of their sites worldwide. DANONE supports integrated farming methods and has carried out environmental audits worldwide.
Compatible Missions: Health and Nutrition
Both companies are leaders in product innovation for delivering products that offer health and nutritional benefits.
Stonyfield Farm is a leader in product innovation and functional yogurts in the U.S. The company’s products contain six live, active cultures, more than any other leading US brand. Stonyfield Farm is the only U.S. yogurt that contains Lactobacillus reuteri, a probiotic that is clinically proven to boost immunity and enhance digestive health. Stonyfield Farm products also contain inulin, a natural dietary fiber and a prebiotic that has been clinically shown to increase calcium absorption up to 40%. Stonyfield Farm uses only milk from farmers who pledge not to use rBST, a growth hormone used in US dairy farming but banned in Europe.
DANONE, an international leader in the research and development of functional foods, supports scientific research through the DANONE Institute, an educational organization dedicated to furthering research on topics of health and nutrition ranging from probiotics to calcium. Some of the company’s products that are targeted to specific nutritional needs include Actimel probiotic drink, calcium-enhanced water, energy-fortified biscuits and many others.
About Stonyfield Farm
Stonyfield Farm is the nation’s fastest-growing yogurt company with all natural and Certified Organic yogurt and ice cream products. The company advocates that healthy food can only come from a healthy planet. It was the first dairy in America to pay farmers more money to not use the synthetic bovine growth hormone rBGH. The company continues to support this practice and leads numerous environmental education programs for kids and adults. For more information, call 1-800-PRO-COWS or visit http://www.stonyfield.com.
About Groupe DANONE
Groupe DANONE is the worldwide leader in fresh yogurt products and bottled water (in volumes), and number 2 worldwide in biscuits. CY 2000 sales amounted to 14.3 billions euros and net income to 792 millions euros. Thanks to its presence in dynamic categories and its international geography of sales, Groupe DANONE is known to deliver internal sales growth above the average of the food industry; like for like sales grew by 7% in 2000. Groupe DANONE has a strong international presence: sales outside Western Europe account for more than 40% of its total net sales, out of which 11% in North America, 13% in Asia, 10% in Latin America, 6% in Eastern Europe and 1% in Africa/Middle East.
Among its leading brands, the Danone/Dannon brand is the largest yogurt brand in the world, Lu the largest biscuit brand in Europe, and Evian, Volvic and Wahaha (China) are 3 of the top 4 bottled water brands (of less than 2 liters) in the world. To learn more about DANONE, visit http://www.danone.com.