China’s largest dairy is in talks to buy America’s No. 1 organic yogurt company, Stonyfield Farm, the New York Post has learned.
Yili Industrial Group Co. has bid around $850 million to buy the Danone-owned BN, +0.12% Stonyfield and is now considered a favorite in the auction, two sources close to the process told The Post.
The bid is higher than expected for a yogurt-maker with $50 million in earnings before interest, taxes depreciation and amortization and revenue of $370 million in 2016 sales, sources said.
Stonyfield has a strong reputation of buying milk from about 1,900 family farms in the Northeast and for producing quality products, said Mark Kastel, co-founder of the farm policy research group Cornucopia Institute.
Besides Yili Industrial Group, Dean Foods DF, -0.82% is also still in the auction to buy Stonyfield, a source said.
This marks a reversal for Dean Foods, which in 2013 spun off its WhiteWave business and now wants to return to the branded organic milk space, the source said.
Danone is selling Stonyfield as part of an agreement reached with the US Department of Justice for winning approval to buy soy-milk-maker WhiteWave for $10 billion.
The French company already owns organic yogurt brand Wallaby.
Yili Industrial in late April announced it was scrapping a plan to buy a nearly 40 percent stake in China-based Shengmu Organic Milk because Beijing regulators would not approve the investment.
Danone and Dean Foods declined comment.
Source: Market Watch
Link: http://www.marketwatch.com/story/chinese-dairy-reportedly-advances-competing-bid-for-us-organic-yogurt-giant-stonyfield-2017-05-10