Danone To Acquire 25.0% Stake In Chinese Dairy Firm Yashili
French dairy giant Danone SA (DANOY.PK), Mengniu and China-based infant milk company Yashili announced that they have signed an agreement allowing Danone to take part in a private placement by Yashili totaling 437 million euros, at a price of HK$3.70 per share.
The transaction will give Danone an equity stake of 25.0% in Yashili, which is one of the People's Republic of China's main infant milk companies. As part of this agreement, Danone will recommend candidates to serve as Yashili's CEO.
Upon completion of the subscription, Mengniu, currently Yashili's majority shareholder, will hold a 51.0% equity interest and Danone will hold 25.0%.
Through this alliance, Danone, Mengniu and Yashili intend to expand and strengthen their cooperation in the infant milk formula (IMF) business in the People's Republic of China (PRC). The parties will study the possibility of an equity investment in Danone's subsidiary Dumex China with a comparable minority stake.
Danone's acquisition of an equity stake in Yashili is subject to the approval of the company's shareholders at their Extraordinary General Meeting and of the relevant authorities. It is expected to be finalized in coming months. (dpa)
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