French multinational food-products maker Danone SA (FR:BN) is selling its U.S. organic dairy unit to private equity (PE) firm Platinum Equity. The terms of the deal remain unknown at the time, but Danone will retain a minority stake in the unit, the company said. The deal includes Danone’s Horizon Organic and Wallaby businesses.
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CAC-40 listed Danone manufactures dairy and plant-based products, bottled water, early-life nutrition products, and medical nutrition products. Some of its well-known brands are Danone/Dannon, Nutricia, Evian, and Volvic. The company’s operations are spread across the Americas, the Middle East, Africa, Europe, and Asia-Pacific. BN stock has gained 22.1% in the past year.
Platinum Equity is a California-based global PE firm. The alternative investment firm invests in diversified sectors, namely Consumers, Financials, Healthcare, and Industrials, among others.
Restructuring Efforts
Danone undertook a strategic review and restructuring of its business in 2022. The sale of its premium U.S. organic brands is part of the Renew Danone strategy.
Danone’s Horizon Organic and Wallaby businesses in the U.S. sell milk, creamers, yogurt, cheese, and butter. These two units contributed 3% of the company’s global revenues.
Although the deal value remains unknown, the company expects the sale to impact its 2024 financials. The sale will help Danone to focus on its core operations of “strong, health-focused brands, and reinvest in our growth priorities,” CEO Antoine de Saint-Affrique added.
What is the Price Target for Danone Stock?
Analysts remain split about Danone’s stock trajectory. On TipRanks, BN stock has a Moderate Buy consensus rating based on seven Buys, one Hold, and two Sell ratings. The Danone SA share price target of €62.75 implies 7.2% upside potential from current levels.
