Danone lifts stake in Mengniu amid dairy deals

Danone doubles its stake in China Mengniu Dairy, as multinational companies are forced to partner local companies or exit amid consolidation.

Danone, the French yoghurt maker, has doubled its stake in China Mengniu Dairy from 4% to 9.9% for HK$5.1 billion $657 million, in a rare example of a foreign company raising its stake in a Chinese state-backed company.

The increase which will make Danone the second largest shareholder after state-backed Cofco is interesting because most deals involving Chinese companies have been outbound.

 “It is rare to see foreigners have stakes or board seats in state-owned enterprises,” said one source familiar with the deal.

That said, last year Germany's Daimler, the parent company of Mercedes Benz bought a 12% stake in BAIC...

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