France's Danone (DANOY) agreed to buy WhiteWave Foods (WWAV) for $12.5 billion including debt, doubling the size of its U.S. sales and expanding into the fast growing non-dairy milk and yogurt sector.

Danone said Thursday it will offer $56.25 in cash for each WhiteWave share, an 18.6% premium to the target's Wednesday closing price of $47.43 per share and a record price for WhiteWave shares. The bid values the targets equity at about $9.84 billion and equates to an Ebitda multiple of 21.2 times forecast earnings for the current year.

"It will allow us to enhance Danone's growth profile and reinforce our resilience through a broader platform in North America," Danone's CEO Emmanuel Faber said in a statement.

The acquisition received a warm welcome from the Paris market, where Danone shares rose to €66.80 ($73.96), up €3.53, or 5.6% on their Wednesday close.

Faber, who took control of Danone in 2014, has been under pressure to find a route to increase sales. The Paris-based company last month warned that this year's organic growth would be in the bottom half of its forecast range of 3% to 5%, due to challenging economic conditions in Argentina, Russia, Brazil and a decline in infant formula sales in China.

The addition of WhiteWave's health-focused products, including the U.S.' biggest almond milk brand, Silk, and the recently acquired Wallaby Organic yogurt, will help the Paris-based buyer target affluent customers, who are driving rapid sales growth in higher-margin health products. WhiteWave made sales of about $3.9 billion in 2015, up 9.5% on the previous year. Revenue is forecast to grow about 9% this year.

WhiteWave is a holding in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio.

Danone said the deal will boost sales in the U.S. by about $3.35 billion, increasing revenue from the U.S. to about $6.6 billion or 22% of its total, up from the current level of 12%. Danone expects the acquisition to immediately boost earnings per share and forecast that increase to grow to about 10% by 2020, when it is forecasting about $300 million a year in cost savings and increased sales resulting from the combination.

"The major part of the synergies will be in by year two," said Danone's CFO Cecile Cabanis said on a conference call on Thursday.

The Ebitda multiple for the deal will drop from the initial 21.2 times to about 14 times earnings once the cost savings and synergies are factored in, said Danone.

The bid is likely to spark some speculation of a potential rival offer. Denver, Col.-based WhiteWave's relatively narrow and high-margin portfolio of health-based foods had long made it a potential takeover target for larger U.S. food companies such as Campbell Soup (CPB) - Get Report , General Mills (GIS) - Get Report and Kellogg (K) - Get Report . TheStreet's Ron Orol last month suggested it could also be a target for PepsiCo (PEP) - Get Report , Hershey (HSY) - Get Report or Nestle.

"This is a compelling transaction that delivers significant cash value to our shareholders," said WhiteWave chairman and CEO Gregg Engles, who is slated to join Danone's board once the transaction completes.

Danone will pay for 100% of the deal using debt. The French company said it did not expect the transaction to alter its investment grade rating. The acquisition needs approval from WhiteWave shareholders as well as U.S. and European Union regulators. It is expected to complete by the end of the year.