French food giant Groupe Danone has today (26 April) announced plans to delist from the US stock market.
The company said that it plans to deregister after delisting its American Depository Receipts (ADRs). Danone said the low level of trading in its shares on the New York Stock Exchange is behind the move.
Ninty-eight percent of trading volume in Danone occurs on Euronext, which is now part of NYSE-Euronext. Trading in ADRs has remained low since 2002, accounting for only 2% of total shares traded over the last four years. This ratio has made its NYSE listing redundant, the company explained.
Announcing the decision, Danone also said that following its 2005 adoption of International Financial Reporting Standards (IFRS) it no longer sees the need to publish financials under two separate accounting standards.
“It is no longer deemed necessary to publish the consolidated accounts under two accounting standards which the company believes are generally equivalent in terms of disclosure and quality of information for investors,” Danone said. The delisting should be completed in July, the company added.
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By GlobalDataDanone will maintain its ADR programme as a ‘level one’ programme, enabling investors to retain their ADRs and facilitating Danone’s trading in the US over-the-counter market.
Danone emphasised that the move did not signal a shift in focus away from the US market. “This decision has no impact on Danone’s continued focus to actively develop its business operations in the US,” it said.
