Danone has clinched a deal to buy US plant-based foods producer, Earth Island, as part of the French food and beverage firm’s plan to generate €5 billion from global plant-based sales by 2025.
Financial terms of the takeover were not disclosed. As part of the deal, Danone (0KFX) has entered into a share purchase agreement to acquire 100% of the shares of Earth Island. With this partnership, Danone hopes to boost and expand its plant-based offerings to provide consumers with more plant-based products and alternatives. The deal is part of the company’s plan to more than double global plant-based sales from €2 billion in 2020 to €5 billion by 2025.
Founded in 1988, Earth Island, which includes brands such as Vegenaise and Follow Your Heart, offers dairy-free shredded and sliced plant-based cheese, grated and shredded plant-based parmesan and cream cheese alternatives, and well as egg-free mayonnaise. The company also produces plant-based sour cream, and salad dressings within their Follow Your Heart portfolio. Danone’s best-known plant-based brands include, Alpro, Silk and So Delicious Dairy Free.
“The Follow Your Heart family shares our commitment to producing high-quality products that delight consumers while contributing to the wellbeing of People and Planet,” said Danone North America CEO Shane Grant. “Consumers are increasingly eating flexitarian diets, and we look forward to working with the Follow Your Heart team to offer our consumers even more choices. This partnership will build on our success in plant-based beverages, yogurt alternatives and creamers, further accelerating the growth of our North American plant-based business.”
The closure of the transaction is subject to regulatory approvals, the two companies said in a joint statement. (See Danone stock analysis on TipRanks)
Societe Generale analyst David Hayes late last month cut the stock’s price target to €47 from €49 and maintained a Sell rating on the shares.
Overall, analysts have a Hold consensus rating on the stock based on 6 Holds, 3 Sells and 4 Buys. With shares up 8.7% over the past three months, the average analyst price target stands at €57.77 and implies upside potential of 1.2% to current levels.