Danone finalizes sale of Mengniu stake, will expand presence

Food and beverage conglomerate Danone SA has finalized the sale of its approximate 9.8 percent stake in China Mengniu Dairy Co Ltd on Thursday as the French company concentrates its efforts on health-focused and fast-growth categories in the Chinese market.

The transaction is valued at HK$15.4 billion ($1.98 billion) and settlement of the transaction will take place on Monday. The majority of the proceeds will be returned to shareholders through a share buyback program, according to Danone.

"The deal will make Danone more laser-focused to develop what really matters to them in China," said Zhu Danpeng, a food and drink analyst based in Guangzhou. "Science and technology-driven products－those with sustainability and high profits－are what multinationals have prioritized in the country."