Chinese dairy giant Yili Group announced that it is planning an approximately $850 million bid for the Danone-owned organic yogurt-maker Stonyfield.
According to news source the Financial Times, Yili’s bid is still in its “preparatory stage,” but the bid could prove enticing to the France-based parent company.
Danone has long been expected to divest some of its assets in pursuit of a $10 billion acquisition deal with the soy milk company WhiteWave, and the company announced last month that it was looking to part with Stonyfield specifically.
Sales of organic dairy products are growing rapidly throughout China as more and more people enter the country’s expanding middle class. Yili had previously made efforts to acquire a large stake in China’s largest organic dairy producer, China Shengmu Organic Milk, but the deal was scuttled this month because of anti-trust concerns.
The Financial Times also noted that Yili had a turnover of $9.3 billion as of 2015, making it China’s largest dairy group—and one of the largest in the world.
According to the New York Post, sources close to the situation have noted that Yili’s proposed 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.
Deli Market News will continue to report on this situation and other important news in the dairy, deli, and bakery industry as it happens.