The Wadia Group’s plans to buy Danone’s stake in Indian joint venture Britannia Industries have reportedly been put on hold.
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Danone and the Wadias own equal shares in Associated Biscuits International Holdings, which holds 51% of Britannia, India’s largest biscuit maker.
The relationship between Danone and the Wadias has been strained since the latter started legal action claiming the French food giant illegally used the intellectual property rights of Britannia’s Tiger brand.
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The companies were in talks that would have seen the Indian group gain control of Britannia following months of speculation over the future of the business. It is believed that the Wadias had expected to complete the deal before the end of this year.
However, citing an unnamed source “close to the development”, India’s Economic Times reported that any decision on the matter has been postponed to the next board meeting in March 2009.
Difficulty securing funding is understood to be the primary reason for the delay. In October, a spokesperson for the Wadias told just-food that the company was “in negotiations with international banks”. However, with the crisis in the international credit markets, these plans have reportedly hit the rocks.
When contacted by just-food, the Wadias declined to comment on the report.
“We have been engaged in discussions with a view to possibly increasing our stake in Britannia,” the spokesperson confirmed.
