The French food and beverage giant Danone has acquired a minority stake in the Mexican Home and Office (HOD) water delivery company Arco.

A sale price was not disclosed.

With sales totalling some 350m litres in 2003, Arco Iris is co-leader in HOD in Guadalajara (Mexico's second largest city), and occupies a strong position in Puebla (the country's fourth largest city).

"This acquisition is part of Groupe Danone's development strategy in the Mexican HOD market, the world's leading market in volumes,"  the company said in a statement.

The deal follows a number of local agreements signed in 2003 (including the acquisition of a 50% stake in UltraPura in Tijuana, and of 100% of AquaPura in Monterrey).

Danone already has a well-established national presence in the Mexican HOD market with the Pureza Aga brand, and is the leader in the bottled water market with the Bonafont brand. The company hopes the Arco Iris and AquaPura transactions will enable the group to speed up development of the Bonafont brand in the HOD sector.