Danone Acquires 40% Stake in Stonyfield Farms

LONDONDERRY, N.H.--Stonyfield Farm announced today that the French company Groupe Danone agreed to acquire an initial 40 percent holding in the company, with the option of purchasing a majority holding in 2004. Under the agreement, Gary Hirshberg, the current chairman, president and chief executive officer (CEO), will retain control of Stonyfield's management. Danone announced that its senior executive vice president in charge of the worldwide Fresh Dairy Products division would be responsible for managing Danone's relationship with Stonyfield (www.stonyfield.com.

"These first two years are really just exploratory for us," said M.J. Viederman, vice president of communications for Stonyfield. "Gary [Hirshberg] is looking to Groupe Danone to provide some cost synergies . before we decide that in fact this partnership is working really well and we're going to allow [Danone] to purchase the remaining non-employee shares."

The synergies Hirshberg is looking to establish with Danone include manufacturing, transportation and distribution. "We really are benefiting by teaming up with a worldwide manufacturing product company," Viederman said. "Eventually, in 2004 and beyond, we really hope to capitalize on some great synergies."

For Groupe Danone, which has been in talks with Stonyfield for more than a year, the agreement with Stonyfield is an opportunity to enter the U.S. organic yogurt market. "Through this unique partnership, Danone will build upon and expand Stonyfield's leadership in the U.S. natural and organic yogurt segment as we provide pivotal assistance in terms on manufacturing, purchasing, logistics and other efficiencies," said Frank Ribound, Danone's chairman and CEO. Ribound also declared his support of Stonyfield's social and environmental message, including its "Profits for the Planet" program that donates 10 percent of the prior year's profits to environmental causes.

"I am especially pleased with Danone's commitment to our ambitious organic, environmental and social mission," Hirshberg stated. "The Stonyfield/Danone partnership is an excellent model for enabling emerging values-driven firms to gain in strength and stature while remaining loyal to the growing base of consumers who support organic and natural products."