Danone is reportedly weighing up whether to sell its 20% stake in Japanese group Yakult.
The French food giant has discussed internally a possible exit from its investment in the probiotic drinks maker, Bloomberg reported today (26 November). No decision has been made, the newswire said.
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Danone refused to comment on the report when contacted by just-food this afternoon.
Danone first invested in Yakult in 2000, when it bought a 5% stake in the business. In 2003, it increased its share in the company to 19% before upping it 20% a year later, when the two companies signed a “strategic alliance” to work on areas including R&D and international expansion. The deal limited Danone to holding 20% of Yakult for five years.
The two companies have worked together on certain initiatives, including a venture in India.
Two years ago, speculation emerged Danone was in talks with Yakult about increasing its stake to 28%.
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By GlobalDataLast April, Danone and Yakult ended their strategic alliance and replaced it with a looser “co-operation framework”. The new deal removed the cap on Danone’s investment in Yakult at 20%.
Alain Oberhuber, an analyst covering Danone for Swiss investment bank MainFirst, said he was unsure the French group would want to sell the Yakult stake.
Oberhuber said any discussions could be another sign Danone is weighing up its investments in the wake of Emmanuel Faber being appointed CEO this summer.
There has been ongoing speculation about whether Danone could sell its medical nutrition arm, while the company has been linked to an acquisition of US infant formula business Mead Johnson.
However, should Danone sell the shares in Yakult, Oberhuber suggested the company could look to use the proceeds to expand its fresh dairy business in Africa.
“They have the expertise in production, in food safety, they know the logistics there and, what’s really important, is competition there is pretty low,” he told just-food.
