Danone will sell two thirds of its stake in Japanese dairy drink Yakult, a sale that should generate approximately 1.5 billion euro.
21 % stake drops down to 7 %
Even though Danone will remain Yakult’s largest shareholder, it will sell 1.8 billion dollars’ worth (about 1.4 billion euro) of shares in the Japanese drink manufacturer, lowering its stake from 21 to 7 %. Danone has been a Yakult shareholder for more than ten years, even though it has competing brands of its own, including yoghurt drinks Activia and Actimel.
The company did not reveal why it will sell the shares, but it might have something to do with the recent addition of activist investment group Convex Management in its shareholder pool. The group bought shares last month and immediately pressured the board: Convex said the food manufacturer will have to improve its competitive position, particularly in Europe.
Makes little sense strategically
The funds from the sale could give the company additional financial power to further invest. Danone could not have fully bought Yakult anyway, because the manufacturer refused a previous attempt.
Strategically, it made little sense to keep hold of such a large stake, because Danone is still the largest shareholder with 7 % and it will also keep its place in the board. Yakult has already announced it will sell the 24.6 million shares itself.