By Pietro Lombardi
Danone SA said Sunday that it wants to sell its stake in Chinese dairy company Mengniu Dairy Co. and return most of the funds it expects to raise to shareholders via a share buyback.
The French food company said that, as a first step toward its disposal plans, it has reached an agreement with Cofco Dairy Investments Ltd. to convert its indirect stake in Mengniu into a direct holding of 9.8%. Mengniu, which manufactures and distributes dairy products, is listed on the Hong Kong Stock Exchange and has a market capitalization of around 18 billion euros ($21.73 billion).
Danone said its indirect stake has a book value of about EUR850 million.
Once the conversion is completed, the French company may sell the holdings this year, in one or more transactions.
Write to Pietro Lombardi at email@example.com; @pietrolombard10
(END) Dow Jones Newswires
March 01, 2021 01:22 ET (06:22 GMT)Copyright (c) 2021 Dow Jones & Company, Inc.