JAPAN – Danone has announced its plans to sell its remaining 6.61% stake in Yakult Japanese probiotic yogurt maker Yakult Honsha, 16 years since it first collaborated with it, in a move that will strengthen the French food group’s balance sheet.
According to Bloomberg the stake is estimated by analysts to be worth about ¥60 billion (US$570 million). Danone is still Yakult’s largest shareholder and has launched the sale via an accelerated bookbuilding process.
The announcement comes two years after Danone divested around two-thirds of its stake in Yakult for €1.3 billion (US$1.53bn), in an effort to streamline its operations. The owner of Silk and Actimel previously held a 21.29% stake in the Japanese drinks firm before selling over 24 million shares in the brand.
Despite the deal, the companies reconfirm their commitment to its long-term strategic collaboration to promote probiotics. Following completion of the sale, existing commercial partnerships, such as its joint ventures in India and Vietnam, will remain in place.
According to Danone, a further announcement will be released with regards to the transaction’s completion and financial details.
Barclays analysts said the sale would help Danone focus expansion of plant-based dairy in Europe and Americas behind its key brands Alpro and Silk, while helping deleverage its balance sheet, reported Market Screener.
Barclays also said Danone should launch a strategic review of its bottled water business, like rival Nestle has, pointing out that the COVID-19 pandemic has hurt sales and profits of a business that was already underperforming.
“Given high investment needs, especially in packaging … we think a solution is needed for the division to be able to grow in a profitable manner,” Barclays said.
Yakult Honsha was founded in 1935 to sell its flagship product, Yakult—a beverage made using lactic acid bacteria, a bacterial strain discovered by Minoru Shirota in the 1920s.
It is a multinational corporation that sells various other products and owns the Tokyo Yakult Swallows baseball team.
The company regularly promotes what the Financial Times called its “idiosyncratic philosophy of ‘Shirota-ism'”, namely that it should sell its products at an affordable price, and that a healthy intestine promotes longer life.
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