French dairy giant Danone has entered into an agreement to acquire WhiteWave Foods in an all-cash deal worth $12.5bn.
The acquisition is expected to double the size of Danone's business in the US, while helping the company to move towards strong sustainable and profitable growth by 2020.
The transaction is expected to close by the end of the year, subject to the approval of WhiteWave's shareholders, regulatory approvals and customary conditions.
WhiteWave earned a revenue of $4bn in 2015 and its portfolio includes large and major branded platforms in North America and Europe in high-growth, on-trend food and beverage categories.
It sells its products under various brands such as Silk, So Delicious, Vega, Alpro, Provamel, Horizon Organic, Wallaby Organic, Earthbound Farm and International Delight.
The company's sales have witnessed a compounded annual growth of 19% between 2012 and 2015.
Danone chief executive officer Emmanuel FABER said: "This unique combination positions us better to address tomorrow's consumer trends and represents a great opportunity to step change the ambition of our plan for an Alimentation revolution and to accelerate our path towards strong sustain able and profitable growth by 2020.
"It will allow us to enhance Danone's growth profile and reinforce our resilience through a broader platform in North America. We are convinced that combining with WhiteWave will create significant value for all of our stakeholders."
The deal is expected to diversify Danone's portfolio and expand its presence in North America, making a major refrigerated dairy player, and food and beverage manufacture in the US.
After the completion of the transaction, Danone's North America footprint would increase from 12 to 22% of its total portfolio.
WhiteWave chairman and chief executive officer Gregg Engles said: "We believe this is a compelling transaction that delivers significant cash value to our shareholders. Danone is a unique company with distinctive capabilities that will enable WhiteWave to reach its next phase of growth."
Last month, Danone confirmed that it had entered into exclusive negotiations to acquire minority stake in premium biscuit maker Michel et Augustin.
Danone planned to make the purchase through its newly-created New York-based venture capital unit Danone Manifesto Ventures.
