Press Releases in Hong Kong

Food group Danone to sell stake in Mengniu dairy company

A view taken on Nov 23, 2020 shows a part of the entrance to the Danone factory in Bailleul, northern France. (PHOTO / AFP)

Danone, under pressure from investment funds over its returns, will sell a 9.8 percent stake in China Mengniu Dairy Company, the food group said on Wednesday.

China Mengniu Dairy has an equity market capitalisation of around HK$166 billion

China Mengniu Dairy has an equity market capitalisation of around HK$166 billion (US$21.4 billion) meaning a sale of Danone's stake could reap around US$2.1 billion, based on latest market prices.

READ MORE: Coca-Cola, Mengniu's JV to sell chilled milk

The French company, whose brands include Actimel yoghurt and Evian water, said the sale would take place via an accelerated bookbuilding process.

Former Danone boss Emmanuel Faber was abruptly ousted as chairman and CEO earlier this year following clashes with some board members over strategy and calls from activist funds for him to resign over the group's lackluster returns compared with some rivals.

ALSO READ: Mengniu to buy dairy company in Australia for US$407m

French business paper Les Echos reported this week that Antoine de Saint-Affrique was the frontrunner to be named as Danone's new CEO. Danone declined to comment on that report.