The FINANCIAL -- Danone announces on February 14 a new phase in its partnership with Yakult, thus strengthening their long- term strategic collaboration in probiotics, while optimizing its capital allocation.
Intensified collaboration to promote and develop probiotics activities
Danone announces that it has signed an amended Memorandum of Understanding with Yakult Honsha Co, Ltd. (“Yakult”), one of the global leaders in probiotic beverages, headquartered and listed in Japan. Building on a formal collaboration existing since 2004, the companies are confirming their commitment to a long-term strategic relationship and shared vision to promote probiotics as part of a balanced diet.
Danone and Yakult will intensify their joint efforts to promote probiotics through the jointly created Global Probiotics Council. The parties also intend to expand the Ishoku Dogen program which aims at deepening the understanding of the link between diet and health.
From a commercial perspective, the partners will study the feasibility of new collaboration projects such as the distribution of Yakult’s products by Danone in European markets where the brand is not currently engaged in substantial business, with Spain as an initial test market.
Reduced stake in Yakult in line with capital allocation priorities
In accordance with its continued focus on disciplined capital allocation, Danone announces in parallel its intention to sell part of its 21.29% stake in Yakult.
The intended divestiture will be carried out through a market transaction launched today by Yakult and expected to settle in March. Yakult has also announced today a JPY 36 billion share buyback program in which Danone will participate.
Danone targets a shareholding of approximately 7% of Yakult’s total outstanding shares following the completion of the transaction, subject to market conditions. With this, Danone is expected to remain Yakult’s largest shareholder and will continue to sit on Yakult’s Board of Directors.
Further announcements with regard to the resulting stake and proceeds received will be made by Danone at completion of the transactions, according to Danone.