France’s Prime Minister said today (4 July) that he has no qualms with Groupe Danone selling its biscuits business to US giant Kraft Foods.
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Two years ago, the French government threatened to protect the whole of Danone from takeover bids from overseas firms.
However, Francois Fillon today told French TV news station BFM that the Government should only get involved if it was in its “strategic” interest – or if jobs were threatened.
“The state should intervene when there is a danger for employment, when there is a strategic issue for an industrial sector. If not, it’s a business matter,” Fillon said. “(In this case) we are not talking about a strategic sector and there is no threat to employment.”
Yesterday, Kraft said it has tabled a bid worth EUR5.3bn (US$7.2bn) Danone’s biscuit and cereal businesses, which include the LU and Petit Dejeuner brands.
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By GlobalDataA definitive agreement is yet to be signed between the two companies. A number of potential obstacles remain before Kraft and Danone can toast a deal. Danone must meet union representatives to persuade its workers of the merits of the offer, while the EU competition authorities may study the impact deal. However, Danone and Kraft expect to close the deal before the end of the year.
