PARIS (dpa-AFX) - French dairy firm Danone SA (DANOY) said Wednesday it will boost stake in Moroccan dairy product company Centrale Laitière to become its controlling majority stake holder. Danone will acquire the stake from Moroccan Investment fund Société Nationale d'Investissement or SNI and boost its stake to about 67.0 percent for a total consideration of 550 million euros or $685 million.
Danone has been a 29.2 percent shareholder of Centrale Laitière since 2001, while a majority stake of 63.4 percent was held by SNI. Following the stake sale, SNI will still hold one-fourth of Centrale Laitière.
Business incubator and developer SNI is a holding company with a portfolio of long-term investments that include leading Moroccan businesses and projects underpinning the Moroccan economy.
SNI is in the process of reducing its scope of operations through disengagement from operational subsidiaries that have reached their cruising speed. The company is shedding its controlling stake in such companies.
Centrale Laitière controls nearly 60 percent of the Moroccan dairy product market, with 30 storage hubs serving 70,000 sales points that generate sales of about 600 million euros. Meanwhile, the Danone brand is already very well known in Morocco through products such as Yawmy, Moufid and Activia, that are being sold by Centrale Laitière.
The deal, expected to be close by the end of 2012, will further boost Danone's presence in the North African market. The deal will also be accretive for Danone's net earnings per share from the first year.
Following the closure of the deal, Danone said it will fully integrate Centrale Laitière into its consolidated accounts.
Danone is one of the fastest-growing food companies in the world, with its products being currently sold on five continents. It has more than 180 production plants globally and generated sales of 19 billion euros in 2011. More than 50 percent of its annual revenues are derived from emerging markets.
Danone lost out on a major deal in late April, when Swiss baby food company Nestle SA (NSRGY.PK) outbid it to acquire healthcare giant Pfizer, Inc.'s (PFE) infant nutrition business for about $11.85 billion.
DANOY closed Wednesday's regular trading session at $11.78, down $0.03 or 0.25% on a volume of 0.13 million shares.
Copyright RTT News/dpa-AFX