May 14, 2021

Danone looks to sell its US$2 billion stake in China Mengniu Dairy Company

French food group Danone is looking to sell a potential US$2 billion stake in China Mengniu Dairy Company following pressure from investment funds over its shareholder returns, Reuters reported.

The sale of Danone's 9.8% stake in the Chinese company could reap US$2.1 billion based on current market prices, as China Mengniu Dairy Company has a market capitalization of about HKD 166 billion (~US$21.4 billion; HKD 10 = US$1.29)

Danone said the sale would take place through an accelerated book building process, with proceeds from the sale returned to shareholders through a share buyback programme.

According to Danone, the transaction resulted in total gross proceeds of HKD 15.4 billion (~US$1.98 billion) or about EUR 1.6 billion euros (US$1.94 billion; EUR 1 = US$1.21). The settlement of the transaction will take place on May 17.

- Reuters