Danone merges business with Russia's Unimilk

09:44, June 19, 2010      

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French food magnate Danone and Russian company Unimilk have announced a merger of their dairy businesses in Russia, Ukraine, Kazakhstan and Belarus, local media reported Friday.

The deal was signed during the 14th International Economic Forum in St. Petersburg in the presence of Russian President Dmitry Medvedev and his French counterpart Nicolas Sarkozy, local RBC Daily newspaper reported.

Danone-Unimilk, with an annual turnover of nearly 1.5 billion euros (1.85 billion U.S. dollars), will have 21 percent of the milk production in Russia.

Danone will hold 57.5 percent of the joint venture shares. The deal will increase Danone's net debt by 1.3 billion euros (1.6 billion dollars). It can bring its stake in the entity up to 100 percent by 2020. The deal will be finalized by the end of 2010 after all judicial formalities are completed.

Danone has a strong market presence in the European part of Russia while Unimilk occupies the country's eastern markets and more "budget" price segments. The merger also marks a successful access by a French company to the usually domestic markets of Russia.

Source: Xinhua


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