FRANCE: Danone eyes water business sale to Suntory - report
Danone has engaged with Suntory over a possible deal and is considering using the proceeds from any sale to fund a bid for Pfizer's infant nutrition business, according to Bloomberg. Citing three people close to the situation, the newswire reported that there is no certainty of a deal and that Danone may end up only selling its water business in Asia.
It is not the first time that Danone's bottled water unit has been the subject of sale speculation. Last year, the French firm was reported to have sounded out both Asahi and Suntory over a possible deal.
In November last year, however, Danone's CEO, Franck Riboud, was quoted as saying that water is part of Danone's DNA. At the time of the sale speculation, one Paris-based analyst told just-drinks: "Mineral water sits very nicely within Danone's strategic emphasis that its products are beneficial to good health and well being."
Net sales at Danone's water business have picked up in the last 12 months. Today (18 October), the group reported an 8% rise in water sales for the three months to the end of September, to EUR816m (US$1.1bn), excluding the effect of currency. Water sales by volume rose by 5% on the same period of last year.
Check back soon for analyst reaction to this story and for Danone's full third-quarter sales figures.
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