Danone has plenty more cash cows to milk in China

China Mengniu Dairy

01/03/2021 09:20

(The author is a Reuters Breakingviews columnist.  The opinions
expressed are her own.)
    By Katrina Hamlin
    HONG KONG, March 1 (Reuters Breakingviews) - Chief Executive
Emmanuel Faber has unveiled his latest plan to placate activist
investors. He wants to sell its $2 bln stake in China Mengniu
Dairy. It means pulling out of a growing firm. But peddling
Danone’s own brands to thirsty Chinese consumers will keep the
cream flowing.    
    Full view will be published shortly.
    On Twitter https://twitter.com/KatrinaHamlin
    
    CONTEXT NEWS
    - Danone is preparing to sell its stake in China Mengniu
Dairy. In a statement on Feb. 28 the Paris-based company said
that following a review of its portfolio it had reached an
agreement to convert its indirect stake in its Chinese dairy
partner into a 9.8% direct holding in the Hong Kong-listed
group. A sale of the direct stake could follow this year in one
or in several transactions, depending on market conditions,
Danone added. The company expects to return proceeds to
shareholders through a share buyback programme.
    - Mengniu’s shares rose by 1.5% to HK$43.05 by the close on
March 1.
    - For previous columns by the author, Reuters customers can
click on  HAMLIN/  
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Danone statement      https://www.danone.com/content/dam/danone-corp/danone-com/medias/medias-en/2021/corporatepressreleases/Pr-Danone-portfolio-review.pdf
Under shareholder pressure, Danone takes step to sell Chinese
asset      urn:newsml:reuters.com:*:nL2N2KY0DP
BREAKINGVIEWS-Australian milk deal looks a little too local   
 urn:newsml:reuters.com:*:nL1N2IA03H
BREAKINGVIEWS-Danone CEO upsets activist’s Nestlé-fication hopes
    urn:newsml:reuters.com:*:nL8N2KP2IX
BREAKINGVIEWS-Activist scratches at surface of Danone malaise   
 urn:newsml:reuters.com:*:nL8N2JU299
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
 (Editing by Antony Currie and Sharon Lam)
 ((katrina.hamlin@thomsonreuters.com; Reuters Messaging:
katrina.hamlin.thomsonreuters.com@reuters.net))