(Yicai International) Could 9 — Danone intends to bring to a standstill its nine-year partnership with China Mengniu Dairy, a yr after the French meals large bought all of its shares in China’s second-largest dairy merchandise maker.
The alliance will finish following completion of three remaining fairness offers, in line with statements the 2 companies launched on Could 6.
Danone will purchase again all of the shares of milk powder maker Dumex China that it bought to Mengniu unit Yashili Worldwide Group in 2016, and Mengniu will purchase again Danone’s 25 p.c of Yashili and its 20 p.c of two joint ventures arrange in 2013.
The transactions will probably be concluded this yr on the earliest. Mengniu then plans to amass a remaining 24 p.c of Hong Kong-listed Yashili [HKG: 1230] and take it personal.
The Dumex share sale is value about CNY870 million (USD130.5 million), whereas that of the JV stakes is about CNY16 million (USD2.4 million), in line with Mengniu. The Yashili deal is value about HKD1.4 billion (USD178.3 million), primarily based on HKD1.20 (15 US cents) per share.
The transactions are follow-ups to Danone’s divestment of its Mengniu shares and won’t influence its long-term technique, the Chinese language dairy large advised Yicai International. They offers will assist Hohhot-based Mengniu optimize assets allocation and improve administration effectivity, it added.
The pair started working collectively in 2013, when Paris-based Danone purchased a 4 p.c stake in Mengniu. In 2014, Danone, COFCO, and Denmark’s Arla Meals shaped COFCO Dairy Investments, a JV by which they owned 9.8 p.c, 16.3 p.c, and 5.3 p.c, respectively, of Mengniu.
The partnership started to collapse when Danone introduced final Could that it had bought its whole stake in Mengniu for HKD15.4 billion (USD2 billion). The synergy was weakening with the event and modifications within the pair’s companies, a dairy business analyst advised Yicai International.
Mengniu’s internet revenue soared 44 p.c to CNY5 billion (USD749.3 million) final yr because of fast development at its high-end milk enterprise, its earnings report confirmed. Income was CNY88.1 billion (USD13.2 billion), up 16 p.c, putting it second solely to Inside Mongolia Yili Industrial Group amongst home diary companies.
Editors: Dou Shicong, Futura Costaglione
