Cofco has agreed to sell 148,014,022 shares in China Mengniu (a Hong-Kong listed company) to the joint venture. Cofco and Danone will own 51% and 49% respectively in the newly formed company.
After the transaction, Cofco will continue to be the single largest shareholder in Mengniu. Danone will become a strategic shareholder in Mengniu, owning an indirect interest of approximately 4% at the initial stage, with an aim to increase the interest in Mengniu based on market conditions in the future.
In addition, Danone and Mengniu have signed a framework agreement to establish a joint venture for the production and sales of chilled yogurt products in China, combining their respective assets in this category for a total 2012 proforma net sales of about €500m, with an estimate market share around 21% and 13 factories across China.
Danone will own 20% and Mengniu 80% of the new joint venture in China. Danone will assign experienced senior executives to join the top management team, assisting Mengniu to further upgrade its management capability.
Danone will invest approximately €325m as a result of the two above cooperation projects. The cooperation will help Mengniu to leverage Danone’s leading product innovation and management capability in the fresh dairy category.
These transactions are subject to the approval of the relevant authorities and are expected to be finalised in the coming months.
Source: Danone
© FoodBev Media Ltd 2024