(Yicai Global) July 4 -- Danone SA has agreed to sell US-based organic yogurt maker Stonyfield to Lactalis, a French company, Yicai Global learned from Danone yesterday. A number of dairy giants including Inner Mongolia Yili Industrial Group Co. [SHA:600887] also made a bid for the US company.

Danone has signed a binding agreement to sell its US subsidiary Stonyfield to Lactalis for USD875 million, information provided by Danone shows. Stonyfield generated about USD370 million in revenues last year. The purchase price represents 20 times Stonyfield's earnings before interest, tax, depreciation, and amortization (EBITDA) in 2016.

Yili bid USD850 million on May 10 to take over Stonyfield. Yili was hoping that the acquisition could help it further improve its high-end organic product lines, especially premium organic yogurt and yogurt for children offerings, and learn from advanced low-temperature yogurt producers in terms of production and management of low-temperature products through collaboration.

Danone's decision to sell Stonyfield to Lactalis could be out of self-protection as selling it to Yili may threaten Danone's low-temperature product business in Asia-Pacific, said Song Liang, a senior dairy expert.

Lactalis is a French dairy giant. It ranked second among the world's top 20 dairy firms by Cooperatieve Rabobank UA last year, behind only Nestle SA [VTX:NESN], with Danone taking third spot and Yili eighth.

Lactalis also has business operations in China but has kept a low profile. It entered the Chinese market in 1998 and set up an office in Shanghai in 2009. It sells dairy products including milk, cream, butter, natural cheeses and re-manufactured cheeses.

Lactalis has ramped up efforts to expand its presence in China in recent years. China's Certification and Accreditation Administration approved Lactalis to sell products under its infant milk formula brand Celia in May 2014. However, it posted lackluster performance. Lactalis introduced Lactel-branded pasteurized milk products into China last year and spent EUR100 million (USD113.4 million) to acquire Jiangsu Taizhou Taizi Dairy Co. early this year.

With the rise of demand for low-temperature yogurt in recent years, more and more dairy companies are focusing on the premium yogurt market, Song said. Lactalis, just like General Mills Inc., may continue to expand its presence in the Chinese low-temperature dairy market after completing the Stonyfield deal.