- China-based Yili Industrial Group has placed an $850 million bid to acquire Stonyfield Farm, according to the New York Post.
- Already the largest dairy in China, the company is looking to buy the Danone-owned organic yogurt maker through an auction process. Dean Foods also is believed to be interested.
- Danone must sell Stonyfield as part of a deal reached with the U.S. Justice Department after getting approval to buy soy milk maker WhiteWave for $10 billion.
Yili Industrial Group is no stranger to the dairy category and its attempt to add Stonyfield to its portfolio is a great way for the company to expand in the U.S. while enhancing its organic line.
The process for Stonyfield’s organic 100% Grassfed Whole Milk yogurt starts in the pasture, with milk from cows that graze exclusively on grass. Numerous nutritionists have championed organic whole milk as being better for people because it contains more beneficial omega-3 and less damaging omega-6 than other milk. It's also less processed, which is big draw for some consumers, especially millennials.
If the Chinese company acquired Stonyfield, its footprint in Asia and overseas would most likely grow and it could create more demand for organic product in those areas of the world. Some feel being associated with a Chinese company could have negative implications for the company, but analysts say involvement with the Western powerhouse has not been a big hindrance on other companies. In addition, having new money behind the products could be a financial windfall for Stonyfield.
For Dean Foods, it could be a way for it to return to branded organic milk after it spun off its WhiteWave unit four years ago. Ironically, the reason Danone is selling Stonyfield in the first place is so it can buy WhiteWave.
The fact that Stonyfield has multiple suitors is further evidence of the popularity of organic products. Stonyfield's product has a solid reputation, and a purchase of the company by Yili, Dean or another company would allow the winning acquirer to have a prominent presence in organic dairy.