Groupe Danone has opened exclusive talks with Kraft Foods over the sale of the French company’s biscuits and cereal division.
Danone said today (3 July) that Kraft yesterday tabled a EUR5.3bn (US$7.2bn) offer for the business, which includes the LU and Petit Dejeuner brands.
Kraft is not looking to buy Danone’s stakes in biscuit businesses in Latin America or India, Danone said.
“The offer of Kraft Foods represents a strong strategic and industrial opportunity for the biscuits and cereal products business,” Danone said “Its future would be consolidated within a group which will place this business at the core of its strategy and invest in it over the long term.”
Danone CEO Franck Riboud said a sale to Kraft would allow the French group to focus on dairy and beverages, businesses that recently have grown faster than its biscuits division.
“Groupe Danone is happy to have helped make the biscuits business and its brands a worldwide reference,” Riboud said. “Today, the quality of the Kraft Foods offer is in line with the quality of the work done by our teams and provides them with new perspectives for their future. Thus, this project is a wonderful opportunity for all players concerned.”
Executives from Danone’s biscuit and cereals division are set to hold talks with union representatives today. Reports in France have claimed union unhappiness at the prospect of the business being sold to an overseas firm.
Danone has insisted that, should a sale to Kraft go through, its European biscuit business will operate as a distinct unit. The companies will also keep Danone’s biscuit manufacturing facilities in France open for at least three years after the transaction is signed.