Danone Poised to Acquire Australia's Made Group in $1.5 Billion Deal

French dairy giant Danone is nearing the completion of a significant acquisition of Made Group, an Australian company behind well-known brands such as Cocobella and Rokeby Farms. The transaction, which could exceed $1.5 billion, is managed by Bank of America on behalf of TPG Capital and seeks a valuation of at least 15 times Made Group's EBITDA, based on its reported $110 million earnings.

Danone's strategic move follows a period of structural adjustments post-pandemic, as the company aims to expand its presence in high-growth, value-added categories. Made Group's product portfolio, including coconut water and high-protein specialty milks, complements Danone's 'Renew' strategy focused on functional nutrition.

The competitive bidding landscape saw the early withdrawal of a consortium led by New Hope Group, indicating potential shifts in regulatory and geopolitical interests concerning Australian agricultural assets. This shift has paved the way for European firms like Danone to strengthen their regional foothold.

This acquisition is part of a broader trend in the Oceania region, highlighted by Lactalis's recent NZ$3.8 billion acquisition of Fonterra's Mainland Group. As local cooperatives pivot towards B2B ingredients, global FMCG companies are capitalizing on high-margin consumer products.

Beyond the immediate market impacts, the acquisition holds implications for the Indian dairy sector, which is experiencing a surge in demand for premium functional products like high-protein shakes and plant-based hybrids. Danone's acquisition of Made Group could serve as a model for similar premiumization efforts in India.

Lastly, the 15x EBITDA valuation sets a benchmark for Indian dairy-tech and clean label startups seeking venture capital or acquisition opportunities. It also suggests increased competition for India's dairy exporters in Southeast Asian markets, where Australian premium brands are highly regarded.