Danone to unload 20pc stake in Bright Dairy
Danone, the world's largest yogurt maker, has agreed to sell its 20 per cent stake in Shanghai-based Bright Dairy and Food amid disputes between the French company and mainland beverage maker Wahaha Group.
Bright Dairy in a statement last night said part of the stake would be sold back to its parent without giving the price and the reason for the deal.
Hong Kong-listed Shanghai Industrial Holdings, an investment flagship of the Shanghai government, said it would buy a 10 per cent stake for 477.42 million yuan, raising its stake to 35.17 per cent.
Danone also agreed to pay 330 million to Bright Dairy to cancel an arrangement allowing the dairy product maker to use its trademark in the mainland.
The withdrawal from Bright Dairy signals a new setback for Danone's mainland strategy of holding a string of minority stakes in several beverage makers.
Apart from the Bright Dairy stake, Danone owns 51 per cent of various Wahaha brand drink joint ventures, 24 per cent of Huiyuan Juice and 49 per cent of a joint venture with China Mengniu Dairy.
Beijing consultant Li Su, a shareholder of Bright Dairy, indicated in June that he had hired lawyers to take Danone to court over its alleged misuse of its position as a major shareholder in many rival mainland companies to the detriment of other investors.
Wahaha founder Zong Qinghou also claimed that Danone was limiting the way his company could expand.
Danone is suing Wahaha in the United States and Sweden, accusing Wahaha of using the brand on products sold outside the joint venture. The two firms also lodged complaints with the Hangzhou Arbitration Commission to settle the disputes.
Shanghai Industrial is paying 4.58 yuan a share for the Bright Dairy stake, a 69.53 per cent discount to the stock's last traded price and a 12.8 per cent premium to the price at which it sold a stake to Danone last year.