SAIF Partners Buying Huiyuan Juice Stake from Danone

PARIS (Reuters) – Danone (DANO.PA) is selling its 22.98 percent stake in Chinese fruit juice company Huiyuan Juice Group (1886.HK) for around 200 million euros ($258 million) to Hong Kong-based private equity group SAIF partners.

The sale is in line with the French food group’s strategy to focus its water division on natural mineral and spring water-based beverages, it said in a statement on Wednesday.

Danone is selling its stake for HK$6 per share, or a 10 percent premium on its July 27 closing price of HK$5.43.

Coca-Cola Co (KO.N) had proposed a $2.4 billion all cash bid for Huiyuan in what would have been the largest ever foreign takeover of a Chinese company, but the deal collapsed in 2009 after China ruled that the proposed transaction would have been bad for industry competition.

“Danone wanted to sell its stake since the aborted Coca-Cola takeover. The Coca-Cola offer valued Danone’s stake at 460 million euros,” Oddo analyst Pierre Tegner said.

“This is good news that the French company found a buyer even if it is two times less than what it would have obtained from Coca-Cola,” he added.

Danone operates 20 factories and employs 9,000 people in China across its four divisions — fresh dairy products, waters, baby nutrition and medical nutrition.

“Danone will continue to focus on the growth opportunities of its four categories in China,” Danone said.

China contributed 4 percent of total 2009 group sales of 14.98 billion euros, according to the group’s annual report.

On Tuesday, Chief financial Officer Pierre-Andre Terisse said Danone remained focused on investing in countries where there were growth opportunities, naming the United States, Russia, Brazil and Asia. ($1=.7746 Euro) (Additional reporting by Noelle Mennella in Paris) (Reporting by Dominique Vidalon; Editing by James Regan)