Danone has entered into a non-binding agreement to purchase a 49% stake in infant-formula maker Yashili New Zealand.
A memorandum of understanding has been signed under which Danone will acquire the stake in the company, which is a subsidiary of Hong Kong-listed Yashili International Holdings and China Mengniu Dairy, one of China’s largest dairy companies.
The three entities are already linked through shareholdings. Mengniu owns 51% of Yashili International Holdings, with Danone also holding 25% of the business. The French group also owns around 10% of Mengniu.
In a statement posted with the Stock Exchange of Hong Kong yesterday (11 June), Yashili International Holdings noted the MOU is not a ”legally binding commitment” and therefore there is no certainty that the deal will materialise.
No further details of the proposed transaction were provided, but the statement added: “The consideration, the payment method and the payment schedule shall be determined after arm’s length negotiations and mutual agreement between the parties and shall be set out in the definitive agreements.”
A definitive agreement may include a share purchase agreement, a shareholders’ agreement and other “documents necessary or desirable to implement the transaction”, the statement noted.
Danone already has operations in New Zealand, including local infant-formula business Danone Nutricia.