French food and drinks group Danone is to sell its 20% stake in the Chinese dairy company Bright Dairy and Food Co. for CNY955m (US$127m).
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Danone has reportedly agreed to sell its 104.24m shares in Bright Dairy at CNY4.85 per share to Shanghai Dairy Group, Bright Dairy’s parent, and SI Products Holdings Ltd.
With the sale, an agreement between the two companies under which Bright markets products under the Danone brand in China will cease, with Danone paying CNY330m to terminate the agreement.
Neither company gave details on why they had decided to end their partnership, other than to say it would free them to focus on their own strategies for the fast-growing Chinese dairy market.
But a Danone spokesperson was quoted as saying that the termination of the deal with Bright would allow it to expand its sales of fresh milk products in China.
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