Danone has signed an agreement to sell its US dairy businesses, including Horizon Organic and Wallaby Organic products, to the American investment firm Platinum Equity, DairyReporter informs.

The completion of the transaction is subject to customary conditions, with Danone retaining a non-controlling minority stake in the business.

Horizon Organic and Wallaby represent approximately 3% of Danone's global revenues. In 2022, the brands had a dilutive impact on Danone's comparable sales growth and recurring operating margin, leading CEO Antoine de Saint-Affrique to conclude that they "do not fit into our priority growth areas."

Horizon Organic is the largest organic dairy brand in North America, offering a portfolio of milk, cream, whitener products, yogurt, cheese, and butter. Wallaby is an Australian-inspired organic yogurt brand.

Danone CEO Antoine de Saint-Affrique stated: "As part of our Renew Danone strategy, we are committed to reviewing our portfolio and rotating assets for companies that do not fit into our priority growth areas to drive value creation.

Today marks an important step in fulfilling this commitment, while also providing Horizon Organic and Wallaby the opportunity to thrive under new leadership. This sale, once completed, will enable us to further focus on our current portfolio of strong, health-focused brands and reinvest in our growth priorities."

Platinum Equity, headquartered in California, has a portfolio of approximately 50 companies across nine industries, from consumer and retail to technology and healthcare. The firm recently announced the pending acquisition of Kohler Energy from Kohler Co. and has also acquired businesses from firms such as Ball Corporation, Caterpillar, ConAgra, Emerson Electric, Ingersoll Rand, and Johnson & Johnson.

The investment firm estimates that the US dairy products category is valued at $68 billion, with milk accounting for approximately $17 billion of this total.

Platinum Equity Co-President Louis Samson commented: "Horizon Organic is an iconic name in dairy, well-recognized and loved by consumers. The brand has earned a reputation for quality and unmatched innovation in the industry.

We appreciate Danone's confidence in our ability to build on this legacy and support the growth of Horizon Organic as a standalone company."

The company's director Adam Cooper said that premium offerings, including organic products, have driven growth in the milk segment, adding: "Horizon Organic is a pioneer in this segment and is poised to continue to capitalize on and accelerate the trend." (Photo: Freepik)