Danone shares fall amid rows about Chinese, Indian JVs

Danone shares fall amid rows about Chinese, Indian JVs
AFP
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First Published: Wed, Apr 18 2007. 01 17 AM IST
Updated: Wed, Apr 18 2007. 01 17 AM IST
Paris: Shares in Groupe Danone SA dipped on Tuesday amid reports of escalating disputes with its Chinese and Indian partners.
In late morning trading here, the price of Danone stock had fallen by 2.19% to €119.48 (Rs6,810.36), marking the biggest fall on French CAC 40 index which was showing a loss of 0.56%.
Workers at Chinese drink maker Wahaha Group Ltd have said they are opposed to a series of takeovers by Danone which would result in the loss of Chinese control of their brand.
The French company, which owns 51% of a joint venture with Wahaha, plans to invest ¥4 billion (Rs2,179.8 crore) for controlling stakes in Wahaha subsidiaries, Wahaha chairman Zong Qinghou told sina.com recently.
The agreement would give the joint venture the exclusive right to produce, distribute and sell food and beverage products under the Wahaha brand, Zong said.
The dispute prompted broker ABN Amro to cut its price target on the company to €125 from €140 and reduce its sales growth estimates for 2007 and 2008 on Tuesday.
Danone is also in dispute with the Indian textiles-to-airline Wadia group over their joint-venture agreement, the press has reported.
According to media reports, the two groups are exploring renegotiating their 1991 joint-venture deal to allow Danone to go it alone in some sectors without its Indian partner’s consent.
Danone, one of the world’s biggest yogurt makers, set up five joint ventures with Wahaha in 1996 under an agreement that bars the Chinese company from making products that compete with it.
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First Published: Wed, Apr 18 2007. 01 17 AM IST
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