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WHEN: Today, Friday, July 8th
WHERE: CNBC's "Squawk on the Street"
Following is the unofficial transcript of a CNBC EXCLUSIVE interview with WhiteWave CEO Gregg Engles and Danone CEO Emmanuel Faber on CNBC's "Squawk on the Street" (M-F, 9AM-11AM ET) today, Friday, July 8th. Following are links to the video on CNBC.com: http://video.cnbc.com/gallery/?video=3000532722
All references must be sourced to CNBC.
EISEN: THE ORGANIC FOOD MAKER WHITEWAVE AGREEING TO BE ACQUIRED BY FRANCIS DANONE THE HOME OF DANON YORGURT FOR 10 BILLION DOLLARS IN CASH AND JOINING US RIGHT FROM NEW YORK CITY IS THE CEO OF DANONE EMANUEL FABER AND THE CEO OF WHITEWAVE GREGG ENGLES, GENTLEMEN THANK YOU FOR JOINING US AT THIS IMPORTANT JUNCTURE FOR YOU BOTH. EMANUEL I WILL START WITH YOU WHITE WAVE HAS LONG BEEN SEEN AS AN ACQUISITION TARGET. HOW LONG HAVE YOU BEEN LOOKING AT IT AND WHY DID YOU DECIDE TO SCOOP IT UP NOW?
E. FABER: I THINK GREGG AND I ENTERED THE DAIRY ORGANIC MARKET IN THE U.S. ABOUT THE SAME TIME 15 YEARS AGO OR MORE WITH HORIZON ON ONE SIDE AND STONYFIELD ON THE OTHER SUDE, WE HAVE HAD A DIALOGUE ABOUT NUTRITION, HEALTHIER WAYS OF EATING AND DRINKING FOR SO MANY YEARS.
EISEN: GREG, AS YOU KNOW THE LIST OF SUITORS HAS BEEN LONG AND WALL STREET HAS BEEN SPECULATING ON THIS FOR AWHILE, ANYONE FROM KELLOGG, CAMPBELLS SOUP, PEPSI, COCA-COLA, WHAT IS DANONE THE RIGHT FIT AND DO YOU EXPECT ANYONE ELSE TO COME IN WITH ANOTHER OFFER?
ENGLES: WELL LET'S DO THE SECOND QUESTION, I HAVE NO IDEA IF SOMEBODY IS GOING TO COME IN WITH ANOTHER OFFER, BUT DANONE IS JUST AN EXTRAORDINARY FIT FOR US AND AN EXTRAORDINARY PARTNER. I THINK IT BEGINS WITH OUR OUTLOOK ON FOOD AND WHERE THE CONSUMER IS GOING AND BOTH OF OUR COMPANIES I THINK HAVE A VERY ALIGNED VISION THAT CONSUMERS WILL INCREASINGLY SEEK HEALTHIER MORE NATURAL ORGANIC OPTIONS, OPTION THAT ARE MORE SUSTAINABLE FOR THE PEOPLE AND THE PLANET AND WE HAVE ALIGNED OUR COMPANIES AND PORTFOLIOS AGAINST THAT VISION OF THE CONSUMER, BUT IT GOES FARTHER THAN THAT. WE BOTH PARTICIPATE VERY MUCH IN THE SAME SECTION OF THE RETAIL STORE IN THE REFRIGERATED CASE. WE HAVE SIMILAR MANUFACTURING TECHNOLOGY, SIMILAR FOOTPRINTS SO FROM AN INDUSTRIAL PERSPECTIVE THE INDUSTRIAL LOGIC IS PRETTY COMPELLING HERE. WE ARE VERY MUCH A HAND AND GLOVE FIT AS IT RELATES TO HOW THE BUSINESSES ACTUALLY WORK, SO VERY MUCH ALIGNED FROM A PHYLISOPHICAL LEVEL, CULTURALLY HOW OUR PEOPLE WORK AND HOW PEOPLE THINK ABOUT THE RESPONSIBILITIES AND THE CONSUMER AND HIGHLY ALIGNED FROM AN INDUSTRIAL PERSPECTIVE.
D. FABER: MR ENGLES THIS IS DAVID FABER. I AM SURE THAT IS SOMETHING YOUR EMPLOYEES WHAT TO HEAR BUT FRANKLY YOUR SHAREHOLDERS COULD CARE LESS, THEY ARE GETTING CASH, THEY WANT AS MUCH AS THEY POSSIBLY CAN GET. I THINK 21 TIMES FORWARD EBITA IT IS A PRETTY DARN GOOD MULTIPLE BUT THERE ARE SOME WHO TOLD ME THEY FEEL YOU CAN DO BETTER. DO YOU FEEL LIKE YOUR BANKERS AND YOURSELF DID A GOOD ENOUGH JOB SURVEYING THE MARKET AND YOU GOT THE BEST PRICE YOU CAN?
ENGLES: WHAT I TELL YOU IS I THINK WE DO THE VERY BEST JOB WE COULD IN TERMS OF CREATING VALUE FOR OUR SHAREHOLDERS. YOU UNDERSTAND THIS PROCESS INCREDIBLY WELL DAVID YOU REPORT ON THIS EVERY MORNING. SO YOU KNOW THERE ARE FIDUCIARY OUTS IN THIS CONTRACTS AND OUR BOARD WILL HAVE EVERY OPPORTUNITY TO CONTINUE TO MAXIMIZE FOR OUR SHAREHOLDERS AND FULFILL ITS DUTIES BUT THIS IS A FANTASTIC FIT IT IS AN INCREDIBLY GOOD DEAL. WE ARE VERY PLEASED WITH IT AS A SHAREOLDER MYSELF I AM VERY PLEASED WITH THE DEAL AND I THINK THIS IS A GREAT DEAL FOR THE BALANCE OF OUR SHAREHOLDERS.
D. FABER: YOU SEEM TO BE LEAVING THE DOOR OPEN TO THE POSSIBILITY AND THERE'S BEEN SPECULATION OF COURSE THE STOCK PRICE TRADED ABOVE THE ACTUAL BID OR I SHOULD SAY THE DEAL PRICE, YOU SEEM TO BE LEAVING THE POSSIBILITY THAT SOMEBODY ELSE COULD COME IN. DO YOU EXPECT THAT THAT REALLY MIGHT BE THE CASE?
ENGLES: AGAIN, I DON'T ANY EXPECTATIONS ONE WAY OR THE OTHER WITH RESPECT TO WHAT OTHER PARTIES MIGHT DO, BUT AS YOU KNOW AS YOU REPORT ON EVERY ONE OF THESE DEALS OUR BOARD CONTINUES TO HAVE THE OPPORTUNITY TO FULFILL ITS FIDUCIARY DUTIES IN THE WAY THIS TRANSACTION IS STRUCTURED.
D. FABER: MR. FABER AND I AM HAPPY TO PRONOUNCE IT THAT WAY EVEN THOUGH WE HAVE THE SAME LAST NAME, WHY IS 21 TIMES FORWARD EBITA A GOOD PRICE TO PAY IT WOULD SEEM TO BE QUITE A MULTIPLE EVEN FOR WHAT IS TO BE FAIR A GROWTH COMPANY?
E. FABER: I THINK THAT GREGG'S POINT ABOUT THE INDUSTRIAL LOGIC OF THIS DEAL IS SPOT ON ON THIS, I REALLY BELIEVE THAT DANONE IS UNIQUELY POSITIONED TO CONTINUE THE SUPPORT THE GROWTH OF WHITEWAVE. WE HAVE 100 YEARS OF RESEARCH. WE HAVE AN UNPARALLELED PRESENCE IN THE UNITED STATES AS MUCH AS IN EUROPEAND OTHER COUNT IN EUROPE AND MANY OTHER COUNTRIES TO REALLY PUSH FORWARD THE WHITEWAVE PORTFOLIO INTO OUR OWN DISTRIBUTION AND THIS CREATES A GREAT SYNERGETIC DEAL FROM A BUSINESS PERSPECTIVE WAY BEYOND THE CULTURE AND SIMILAR VISION OF THE WORLD FOR THE TWO COMPANIES AND GREGG AND MYSELF. IT IS TRULY A UNIQUE OPPORTUNITY FOR WHITEWAVE SHAREHOLDERS AND YET A COMPELLING TRANSACTION FOR DANONE'S TRANSFORMATION. IN THE VERY LONG-TERM. THIS IS REALLY AN INVESTMENT WE ARE MAKING FOR THE LONG-TERM AND I AM HAPPY THAT OUR SHAREHOLDERS ARE ALIGNED AS WE MOVE FORWARD INTO THIS TRANSFORMATION.
EISEN: CAN YOU BE A LITTLE BIT MORE SPECIFIC, EMANUEL, AS TO WHAT YOU SEE IN TERMS OF GROWTH OPPORTUNITIES FOR WHITEWAVE AND NEW PRODUCTS, ARE WE GOING TO SEE PLANT BASED YOGURT? AND NEW GEOGRAPHIES AS WELL?
E. FABER: YEH FOR INSTANCE DANONE HAS A GLOBAL REACH 50% OF OUR SALES ARE IN EMERGING COUNTRIES, WHITE WAVE IS 85% IN NORTH AMERICA AND 15% IN EUROPE. SO THE WHOLE WORLD IS NOW OPEN FOR US. ANOTHER EXAMPLE IS THAT THERE IS A BARRIER BETWEEN PLANT BASED PROTEIN AND DAIRY PROTEIN AND WE ARE REMOVING THIS BARRIER AND SUDDENLY PUTTING TOGETHER THE RESEARCH OF THE TWO LEADING GLOBAL COMPANIES IN THAT FIELD SO THAT OPENS AN ENTIRELY NEW INNOVATION AND PERSPECTIVE A WIDE SPACE FOR NEW HEALTHIER SUSTAINABLE PRODUCTS EATING AND DRINKING OPTIONS FOR OUR CONSUMERS.
EISEN: AND GREG, THAT'S BEEN SUCH A PROBLEM FOR BIG FOOD COMPANIES, EVER SINCE I JOINED CNBC IT HAS BEEN ONE AFTER ANOTHER ANNIES BOLDER BRANDS DIAMOND FOODS, ALL GETTING SCOOPED UP BY THESE COMPANIES THAT CAN'T FIGURE OUT WHERE THE GROWTH AND REALLY CAN'T FIGURE OUT WHERE THE CONSUMER IS GOING, HOW DO YOU MAKE SURE I KNOW YOU ARE JOINING THE BOARD THAT WHITEWAVE CAN STAY INNOVATIVE AND STAY ON TOP OF THE FOOD TRENDS WHEN IT IS GETTING GOBBLED UP BY A BIGGER MULTI-NATIONAL BRAND WITH A VERY DIFFERENT CULTURE?
ENGLES: I THINK THERE'S A REALLY BIG DIFFERENCE BETWEEN DANONE AND THE REST OF BIG FOOD. DANONE HAS LONG BEEN FOCUSED ON HEALTHY SUSTAINABLE LIVING AND ITS PRODUCT PORTFOLIO IS WELL POSITIONED AGAINST THAT. EMANUEL'S ORGANIZATION JUST RECENTLY ANNOUNCED IN THE UNITED STATES FOR EXAMPLE THAT THEIR TRANSITIONING TO A FULLY NON-GMO SUPPLY CHAIN EVEN IN THEIR MILK SUPPLY , SO ALL THEIR ANIMALS WILL BE FED NON-GMO FEED OVER THE NEXT THREE YEARS, SO THAT'S A VERY IMPORTANT TRANSITION. DANONE AND WHITEWAVE ARE THE TWOFASTEST GROWING COMPANIES IN THE FOOD INDUSTRY IN THE UNITED STATES. WHITEWAVE BEING THE FASTEST GROWING AND DANONE THE SECOND FASTEST GROWING, SO THIS ISN'T AN ORGANIZATION THAT DOESN'T KNOW HOW TO GROW, THEY ARE A VERY HIGH GROWING ORGANIZATION. WE HAVE TO MAINTAIN THE ENTREPRENURIAL SPIRIT TO BRINGING NEW INVASION TO THE MARKETPLACE AND WE HAVE TO STAY ON THE CUTTING EDGE OF WHERE THE CONSUMER IS GOING AND I THINK DANONE IS INTENT ON KEEPING THAT SOFT ASSET THEY ARE GETTING IN WHITEWAVE THIS INSTINCTUAL ABILITY TO KNOW HOW TO GROW.
EISEN: EMANUEL I AM GLAD THAT GREGG BROUGHT UP THE GMO POINT BECAUSE WE JUST GOT THE SENATE IN THIS COUNTRY PASSING LEGISLATION THERE WOULD BE A NATIONWIDE RULE THAT FOOD MANUFACTURES WOULD HAVE TO DISPLAY GMO INGREDIENTS. EXPECTED TO PASS IN THE HOUSE. BIG FOOD HAS BEEN LOBBYING HARD AGAINST THIS I AM JUST CURIOUS WHAT YOU THINK AS YOU INCREASE YOUR US BUSINESS HOW COSTLY THAT WOULD BE THE CHANGE THE LABELS AND POTENTIALLY LOSE CONSUMERS AS A RESULT?
E. FABER: WE DECIDED TO EXTRACT OURSELVES FROM THE POLITICAL DEBATE HERE. WE TRULY SUPPORT THE JUST LABEL INITIATIVE OF MY FRIEND GARY HERSHBERG AND OTHERS WE MADE A DECISION THAT WE WOULD LABEL WHATEVER GOVERNMENT OR WHATEVER REGULATIONS MIGHT BE BY THE END OF 2017 THE PRESENCE OF GMOs IN OUR PRODUCTS AND AS GREGG SAID WE ARE NOW TRANSITIONING OUR TOP THREE BRANDS IN THE UNITED STATES, A TOTAL OF $1 BILLION SALES FOR DANNON, OIKOS AND DANIMALS OUR KIDS BRAND INTO A FULLY NON-GMO SUPPLY, SO WE MADE THAT RESPONSIBILITY FOR OURSELVES WORKING IN PARTNERSHIP WITH A NUMBER OF INTERESTED PARTIES, NGOS, AGRICULTURAL COMPANIES, ACADEMICS AND OF COURSE OUR FARMERS TO TRANSITION THOUSANDS OF ACRES INTO NON-GMO FEED IN THE NEXT TWO YEARS SO WE ARE NOW IN THAT DEBATE, RUNNING THAT WAY AND THAT'S ONE OF THE ASPECTS OF THE MOMENTUM OF THIS AGREEMENT WITH WHITEWAVE REALLY MAKES SENSE HERE IN THE U.S. FOR US.
EISEN: GENTLEMEN, THANK YOU FOR JO N JOINING US THIS MORNING AS YOU ANNOUNCE THIS DEAL.
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