Danone has successfully completed its EUR3bn (US$4.2bn) rights issue, which was over-subscribed by 182%, with demand for the offering totalling around EUR5.5bn.

In an announcement this morning (23 June), Danone said 121m new shares were subscribed based on irrevocable rights, representing 98.2% of the newly issued shares. Demand for excess shares by rights holders amounted to 102.8m new shares, of which only 2.2m could be allocated.

The proceeds of the rights issue will be used “principally for the reduction of Danone’s net financial debt”, the company said.

The French dairy group indicated that the capital would enable it to strengthen its capital structure, reduce its financial leverage and improve its credit metrics.

Danone also emphasised that the injection of funds would increase financial and strategic flexibility, with a view to support its organic growth model and finance potential add-on acquisitions.

Yesterday, Argentine dairy La Serenisima admitted it has held talks with Danone over a possible new business venture between the two companies. 

The two companies have worked together since 1996, with Danone marketing La Serenisima’s yoghurts and desserts brands.