Investment bankers are agitated around Lactalis and Danone
Advisor to Lactalis, Perella Weinberg Partners is considering scenarios for the partial or total takeover of Danone. The operation would be complex for Emmanuel Besnier's group, which has a turnover lower than that of the agri-food giant. On the side of Danone, Olivier Pécoux, CEO of Rothschild in Paris, is in charge.
As he is very discreet, we do not know if he thinks about it every morning while shaving, but Emmanuel Besnier, the chairman of the management board of Lactalis, obviously dreams of attacking the French leader in the food industry. According to our information, the global milk giant, owner of President Camembert, Lactel milk and Galbani mozzarella, has been studying all possible options for several months to buy all or part of Danone.
Around this silent boss, equally discreet bankers and advisers are at work. The faithful Thierry d'Argent, director of the investment banking part of Société Générale, which manages the money for the family business, had lunch with him last week. On the legal side, Jean-Marc Grosperrin was involved in all the major recent deals, such as the acquisition in 2018 of the infant nutrition branch of Aspen Pharmacare, and currently continues to provide his advice.
But, it is above all David Azéma, director of the French branch of the American investment bank Perella Weinberg Partners since 2017, who would study the possible arrangements. This former commissioner at the State Shareholding Agency (APE), then worked for Bank of America, notably advised Veolia in the takeover of Suez. Last summer, he was already mandated by Lactalis for the takeover of the Leerdammer brand from its competitor Bel.
Too big a target for Lactalis?
The acquisition of all or part of Danone would of course be of a completely different dimension. The company is worth more than 30 billion euros on the stock market. By adding about 15 billion of debt, the amount climbs to more than 50 billion. It is therefore impossible for the Mayenne group, which achieved around 21 billion euros in turnover last year against 24 billion for Danone, to swallow such a piece without resorting to complicated financial arrangements. The consortium is possible to carve the beast together. Other more scholarly arrangements exist. In any case, it would be necessary to offload whole sections of the owner of Danette and Activia. Like water, which weighs 18% of the activity, or medical nutrition, whose operating margin is around 25%. The operation is therefore far from successful.
One thing is certain, Danone has been weakened by its recent change of management after the dismissal of former CEO Emmanuel Faber, then the arrival of new chairman Gilles Schnepp and his managing director, Antoine de Saint-Affrique. The return to growth strategy presented to investors on March 8 has given some analysts hope, while others criticize the lack of a clear course. The board of directors is in the renewal phase and the share price remains low, around €50-52.
For Lactalis, the advantages of a merger would be numerous. The cheese and milk giant has long been involved in infant nutrition. When it bought Numico in 2007, Danone had already sold part of its assets to Lactalis. In China, Danone's positions in this sector are interesting. The group is also well established in Latin America since the acquisition of the Italian Parmalat in 2011. But Emmanuel Besnier dreams of further conquering the American market, where he has already bought Stonyfield from Danone in 2017. Finally, Lactalis wants to diversify in plants, like Bel and Danone, which did not hesitate to put 11 billion euros on the table in 2016 to buy plant-based milks from WhiteWave Foods.
Danone's advice on being on the alert
On the Danone side, the new general manager also has lunches with the bankers. According to our information, Matthieu Pigasse, the boss of the French branch of Centerview, came to lend a hand to Antoine de Saint-Affrique for the development of his strategy exposed on March 8th. This former employee of Lazare therefore contributed to defining the scope of assets concerned by the disposals announced up to 10% of turnover. Banker Philippe Villin, who worked extensively alongside Gilles Schnepp to overthrow Emmanuel Faber, had lunch with Antoine de Saint-Affrique at the Bristol on April 14.
But it is mainly Olivier Pécoux, managing director of Rothschild in Paris, who is in charge. Him and Anthony
Advisor to Lactalis, Perella Weinberg Partners is considering scenarios for the partial or total takeover of Danone. The operation would be complex for Emmanuel Besnier's group, which has a turnover lower than that of the agri-food giant. On the side of Danone, Olivier Pécoux, CEO of Rothschild in Paris, is in charge.
As he is very discreet, we do not know if he thinks about it every morning while shaving, but Emmanuel Besnier, the chairman of the management board of Lactalis, obviously dreams of attacking the French leader in the food industry. According to our information, the global milk giant, owner of President Camembert, Lactel milk and Galbani mozzarella, has been studying all possible options for several months to buy all or part of Danone.
Around this silent boss, equally discreet bankers and advisers are at work. The faithful Thierry d'Argent, director of the investment banking part of Société Générale, which manages the money for the family business, had lunch with him last week. On the legal side, Jean-Marc Grosperrin was involved in all the major recent deals, such as the acquisition in 2018 of the infant nutrition branch of Aspen Pharmacare, and currently continues to provide his advice.
But, it is above all David Azéma, director of the French branch of the American investment bank Perella Weinberg Partners since 2017, who would study the possible arrangements. This former commissioner at the State Shareholding Agency (APE), then worked for Bank of America, notably advised Veolia in the takeover of Suez. Last summer, he was already mandated by Lactalis for the takeover of the Leerdammer brand from its competitor Bel.
Too big a target for Lactalis?
The acquisition of all or part of Danone would of course be of a completely different dimension. The company is worth more than 30 billion euros on the stock market. By adding about 15 billion of debt, the amount climbs to more than 50 billion. It is therefore impossible for the Mayenne group, which achieved around 21 billion euros in turnover last year against 24 billion for Danone, to swallow such a piece without resorting to complicated financial arrangements. The consortium is possible to carve the beast together. Other more scholarly arrangements exist. In any case, it would be necessary to offload whole sections of the owner of Danette and Activia. Like water, which weighs 18% of the activity, or medical nutrition, whose operating margin is around 25%. The operation is therefore far from successful.
One thing is certain, Danone has been weakened by its recent change of management after the dismissal of former CEO Emmanuel Faber, then the arrival of new chairman Gilles Schnepp and his managing director, Antoine de Saint-Affrique. The return to growth strategy presented to investors on March 8 has given some analysts hope, while others criticize the lack of a clear course. The board of directors is in the renewal phase and the share price remains low, around €50-52.
For Lactalis, the advantages of a merger would be numerous. The cheese and milk giant has long been involved in infant nutrition. When it bought Numico in 2007, Danone had already sold part of its assets to Lactalis. In China, Danone's positions in this sector are interesting. The group is also well established in Latin America since the acquisition of the Italian Parmalat in 2011. But Emmanuel Besnier dreams of further conquering the American market, where he has already bought Stonyfield from Danone in 2017. Finally, Lactalis wants to diversify in plants, like Bel and Danone, which did not hesitate to put 11 billion euros on the table in 2016 to buy plant-based milks from WhiteWave Foods.
Danone's advice on being on the alert
On the Danone side, the new general manager also has lunches with the bankers. According to our information, Matthieu Pigasse, the boss of the French branch of Centerview, came to lend a hand to Antoine de Saint-Affrique for the development of his strategy exposed on March 8th. This former employee of Lazare therefore contributed to defining the scope of assets concerned by the disposals announced up to 10% of turnover. Banker Philippe Villin, who worked extensively alongside Gilles Schnepp to overthrow Emmanuel Faber, had lunch with Antoine de Saint-Affrique at the Bristol on April 14.
But it is mainly Olivier Pécoux, managing director of Rothschild in Paris, who is in charge. Him and Anthony