Yakult Honsha Co. said Thursday its largest shareholder, Groupe Danone of France, has agreed not to acquire a controlling stake for at least another decade.
The French food giant's next move had been anxiously watched since it raised its stake in Yakult to 20 percent from 5 percent last year. Yakult is best known for its popular small yogurt drink.
The agreement was part of a strategic business alliance between the two companies that was unveiled Thursday.
Under the tieup, Yakult and Danone will jointly develop and market so-called probiotics drinks.
To strengthen ties, Yakult will accept two Danone officials on its board, while one Yakult official will join Danone's board, officials said.
"I think the alliance will create great value for the future of the two companies," Danone Chief Executive Franck Riboud told a joint news conference in Tokyo.
The companies said the alliance will be limited to overseas markets for the foreseeable future. The agreement will not affect Danone's existing partnerships with other Japanese companies.
To allay Yakult's fear of a takeover, the agreement stipulates that Danone will not acquire a controlling stake within the next 10 years. Yakult officials also said that under the agreement, Danone will not acquire more than a third of outstanding shares.