• Bloomberg


Danone, the world’s largest yogurt maker, is considering selling its 20 percent stake in dairy-drink producer Yakult Honsha Co., according to sources.

Danone, based in Paris, has held internal discussions about a possible disposal, the sources said, asking not to be identified because the details aren’t public.

The deliberations are at an early stage and no decision has been made, they said.\

Tokyo-based Yakult’s market value is about ¥1.2 trillion ($10 billion), making the stake worth about $2 billion.

In Thursday’s trading on the Tokyo Stock Exchange, Yakult Honsha’s shares price tumbled by ¥410, or 6.1 percent, to ¥6,290.

“The news about Danone seems to have triggered the selloff” of Yakult shares, said Minoru Matsuno, president of Value Search Asset Management Co., a Tokyo-based investment advisory firm.

A sale would end the French company’s 10-year-old agreement with Yakult, which makes probiotic and fermented milk drinks that are similar to offerings from Danone. It could also raise cash for potential acquisitions, as the company seeks growth after reporting its first annual profit decline in more than a decade last year.

The value of any deal depends on what Danone does with the money, Jeff Stent, an analyst at Exane BNP Paribas, said.

“Coupled with ongoing speculation around the medical business, potentially Danone will be monetizing quite a lot of assets,” Stent said. A potential sale of its stake in Yakult “will help fuel speculation that they will get more acquisitive.”

Danone’s management discussed possible targets, including U.S. baby-food maker Mead Johnson Nutrition Co., which is valued at $20.5 billion, at a board meeting last month, according to a separate source.

Yakult shares have rallied 26 percent this year to a record high, after the company raised its full-year target for net income this month.

Danone shares have made a 7.4 percent gain in the same period, valuing the company at €36 billion ($45 billion).

The maker of Activia yogurt and Evian water had previously sought to increase its holding in Yakult, but the Japanese company opposed the move.

Danone hasn’t boosted its shareholding in Yakult, despite a renewal of the pact last year that removed a limit on the size of its stake.

Representatives for Danone and Yakult declined comment.

Danone is also discussing a sale of its medical-nutrition business with potential suitors, including Fresenius SE and several buyout firms, sources said.

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