Yashili seals $159 mln deal for Danone's Dumex China unit

Yashili International Holdings

02/12/2015 01:15

HONG KONG, Dec 2 (Reuters) - Yashili International Group Ltd 
 1230.HK  has completed a 150 million euro ($159 million) deal 
to buy all of Danone SA's  DANO.PA  infant formula unit Dumex 
China, the firms said on Wednesday. 
    France's Danone has been struggling to revive its Dumex 
China unit after food safety scares damaged the business, 
squeezing its share of a fiercely competitive $20 billion infant 
formula market. 
    "By bringing the Dumex and Yashili brands closer together, 
the operation will build a strong local infant milk formula 
(IMF) brand platform," Danone said in a statement on Wednesday, 
confirming completion of the deal. 
    Danone said in July it was planning to sell its flagship 
Dumex infant formula unit in China, which has been hit by food 
scares, taking a 398 million euros ($437 million) impairment 
charge.  urn:newsml:reuters.com:*:nP6N0X601L 
    Dumex China saw its net sales plummet to 1.3 billion yuan 
($203.2 million) in 2013 from 5.7 billion yuan ($890.8 million) 
in 2012, after a food safety scare in 2013 hit the brand's 
reputation with consumers. The scare, linked to New Zealand 
supplier Fonterra  FCG.NZ , was later shown to be unfounded. 
    Mengniu owns just over 51 percent of Yashili, while Danone 
holds a 25 percent stake. 
    The deal is subject to approval from authorities and 
Yashili's shareholders. 
 
($1 = 0.9410 euros) 
($1 = 6.3985 Chinese yuan renminbi) 
 
 (Reporting by Donny Kwok and Adam Jourdan; Editing by Stephen 
Coates) 
 ((donny.kwok@thomsonreuters.com; +852 2843 6470; Reuters 
Messaging: donny.kwok.reuters.com@reuters.net)) 
 
Keywords: YASHILI DANONE/DEALS