Danone SA is paving the way to sell its stake in China Mengniu Dairy Co (中國蒙牛乳業) later this year by converting the investment into a direct holding.
The 9.8 percent stake is held indirectly and has a book value of 850 million euros (US$1.03 billion), the world’s largest yogurt maker said in a statement on Sunday.
The majority of the proceeds would be returned to shareholders through a share buyback program.
Photo: Patrick Kovarik, AFP
China Mengniu shares early yesterday climbed as much as 3.4 percent amid a broader market rally in Hong Kong.
Danone started a strategic review in October last year, when it announced plans to sell smaller businesses such as the Vega protein-powder brand and Argentinian operations.
Chief executive officer Emmanuel Faber last month also said that Danone would divest assets that do not contribute to profitable growth.
Faber is under scrutiny after the stock lost one-quarter of its value last year, and has faced increasing pressure from investors. Artisan Partners Asset Management Inc and Bluebell Capital Partners have called on the company to replace him to ensure change and improved performance.
“Today’s announcement is an example of our commitment to deliver portfolio optimization and improve returns to shareholders through disciplined capital allocation,” chief financial officer Juergen Esser said in an e-mailed statement.
Danone first took a stake in Mengniu in 2013, and said that China would remain highly strategic for the company following the sale.
The conversion process is subject to regulatory approval and the divestiture could take place in one or several transactions, depending on market conditions, the company said.
The stake contributed 57 million euros to Danone’s recurring income from associates in 2019.
Mengniu said in a statement that it respects Danone’s decision and the move would not affect its business strategies and plans.
The planned sale of shares, which are indirectly owned by Danone and COFCO Corp (中國糧油), Mengniu’s biggest shareholder, would cut COFCO’s holding to 21.43 percent from 31.25 percent.
The Chinese dairy maker is expected to post a 17 percent profit decline last year amid the COVID-19 pandemic’s disruption of the supply chain and logistics, after reporting profit growth of more than 30 percent both in 2018 and 2019.
SETBACK: Apple’s India iPhone push has been disrupted after Foxconn recalled hundreds of Chinese engineers, amid Beijing’s attempts to curb tech transfers Apple Inc assembly partner Hon Hai Precision Industry Co (鴻海精密), also known internationally as Foxconn Technology Group (富士康科技集團), has recalled about 300 Chinese engineers from a factory in India, the latest setback for the iPhone maker’s push to rapidly expand in the country. The extraction of Chinese workers from the factory of Yuzhan Technology (India) Private Ltd, a Hon Hai component unit, in southern Tamil Nadu state, is the second such move in a few months. The company has started flying in Taiwanese engineers to replace staff leaving, people familiar with the matter said, asking not to be named, as the
The prices of gasoline and diesel at domestic fuel stations are to rise NT$0.1 and NT$0.4 per liter this week respectively, after international crude oil prices rose last week, CPC Corp, Taiwan (台灣中油) and Formosa Petrochemical Corp (台塑石化) announced yesterday. Effective today, gasoline prices at CPC and Formosa stations are to rise to NT$27.3, NT$28.8 and NT$30.8 per liter for 92, 95 and 98-octane unleaded gasoline respectively, the companies said in separate statements. The price of premium diesel is to rise to NT$26.2 per liter at CPC stations and NT$26 at Formosa pumps, they said. The announcements came after international crude oil prices
DOLLAR SIGNS: The central bank rejected claims that the NT dollar had appreciated 10 percentage points more than the yen or the won against the greenback The New Taiwan dollar yesterday fell for a sixth day to its weakest level in three months, driven by equity-related outflows and reactions to an economics official’s exchange rate remarks. The NT dollar slid NT$0.197, or 0.65 percent, to close at NT$30.505 per US dollar, central bank data showed. The local currency has depreciated 1.97 percent so far this month, ranking as the weakest performer among Asian currencies. Dealers attributed the retreat to foreign investors wiring capital gains and dividends abroad after taking profit in local shares. They also pointed to reports that Washington might consider taking equity stakes in chipmakers, including Taiwan Semiconductor
A German company is putting used electric vehicle batteries to new use by stacking them into fridge-size units that homes and businesses can use to store their excess solar and wind energy. This week, the company Voltfang — which means “catching volts” — opened its first industrial site in Aachen, Germany, near the Belgian and Dutch borders. With about 100 staff, Voltfang says it is the biggest facility of its kind in Europe in the budding sector of refurbishing lithium-ion batteries. Its CEO David Oudsandji hopes it would help Europe’s biggest economy ween itself off fossil fuels and increasingly rely on climate-friendly renewables. While