October 16, 2007

Danone pulls out of China's Bright Dairy

French food giant Groupe Danone SA will sell its entire 20.01-percent stake in Shanghai-based Bright Dairy and Food for RMB 955 million (US$ 127 million), the Chinese company said Tuesday (October 16, 2007).

Danone agreed to sell 104.24 million shares in Bright Dairy at RMB 4.85 per share to each of Bright Dairy's parent Shanghai Dairy Group and S.I. Products Holdings Ltd, Bright Dairy said in a statement to the Shanghai Stock Exchange.

The statement did not give any reasons for the sale.

The two companies will also terminate an agreement under which Bright Dairy sold and promoted Danone-branded products and used the French company's technologies, the statement said.

Danone will pay RMB 330 million (US$43.9 million)  to Bright Dairy as compensation for marketing and distribution expense for Danone, it added.

The deal is still subject to approval from a shareholder meeting on October 31, the China Securities Regulatory Commission and the Ministry of Commerce.