Global food group Danone has announced the sale of the minority stakes it held in Yashili and Inner Mongolia Dairy Joint Venture to Mengniu.
The group will acquire from Yashili 100% of Dumex Baby Food Co Ltd, a Chinese manufacturer of infant milk formula products.
Conclusion Of Danone And Mengniu Partnership
The move sees Danone sell its 25% stake in Yashili and the 20% stake it holds in the Inner Mongolia Dairy Joint Venture
The proposed transactions are not required to close simultaneously, Danone noted.
Subject to the satisfaction or waiver of the conditions of each of the proposed transactions, it is expected that the earliest closing could take place this year.
Further announcement(s) on the satisfaction or, where applicable, waiver of conditions of the proposed transactions will be made in accordance with the Listing Rules and the Takeovers Code of Hong Kong, Danone added.
The completion of these transactions will lead to the conclusion of the partnership between Danone and Mengniu over the last few years. In 2021, Danone disposed its 9.8% minority stake in Mengniu.
Danone noted that China remains 'highly strategic' for the group and it hopes that this sale will allow the company to further expand its ability to locally manufacture infant milk formula products.
The expected proceeds will be dedicated to further deleveraging the company, in line with Danone’s capital allocation priorities.