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Danone completes sale of 14% stake in Yakult for EUR1.3bn

DBR Staff Writer Published 29 March 2018

French food and beverage-maker Danone has completed the part sale of its stake in Japanese probiotic drinks-maker Yakult Honsha for €1.3bn.

Danone earlier held a 21.29% interest in Yakult. The company has now has sold over 24 million shares in brand, though Danone will retain a 7% stake in Yakult.

Danone will remain as the largest shareholder in Yakult Honsha, after the stake sale. It will also recommend two directors for approval at the AGM of Yakult Honsha.

The transaction is part of Danone's capital allocation priorities. The company will use the proceeds in reducing its debt ratio and to invest in accelerating its organic growth and maximizing efficiencies towards 2020 for sustainable value creation.

Yakult announced the JPY36bn ($338m) share buyback program in February, where Danone took part. This divestment was undertaken through a market transaction.

Danone stated that the two companies will maintain their long-term partnership and enhance their collaboration activities.

As part of their relationship, the two companies will study the feasibility of collaborating in projects in the future, to explore distribution of Yakult’s products in Europe, where the brand does not have significant presence. Yakult’s products will be first released in Spain.

Danone and Yakult also expected to work on their joint efforts in promoting probiotics through the jointly created Global Probiotics Council. They also plan to expand the Ishoku Dogen program that is aimed at deepening the understanding of the link between diet and health.

In the recent years Danone is said to have been facing tough competition in its core dairy business in Europe. It’s sales slumped due to some marketing missteps.

Image: Pack of Yakult bottles. Photo: Courtesy of Amin/Wikipedia.org.