French food group Danone on Thursday said that most of the proceeds from a $2 billion divestment of its stake in China Mengniu Dairy Company will be returned to shareholders through a share buyback programme, it said on Thursday.
Danone, under pressure from investment funds over its shareholder returns, on Wednesday said it would sell its 9.8% stake in China Mengniu Dairy.
"The transaction resulted in total gross proceeds of 15.4 billion Hong Kong dollars, representing about €1.6 billion ($1.94 billion). The settlement of the transaction will take place on 17 May," Danone said.
Shares in the French company, the brands of which include Actimel yoghurt and Evian water, fell 0.6% in early trading, outperforming a 1.8% decline for the CAC 40 index in Paris.
Former Danone boss Emmanuel Faber was ousted as chairman and CEO this year after clashes with some board members over strategy and calls from activist funds for him to resign over the group's lacklustre returns compared with some rivals.
French paper Les Echos this week reported that Antoine de Saint-Affrique was the frontrunner to become Danone's new CEO. Danone declined to comment on that report.
Danone, under pressure from investment funds over its returns, will sell a 9.8% stake in China Mengniu Dairy Company, the food group said on Wednesday (12 May 2021).
China Mengniu Dairy has an equity market capitalisation of around 166 billion Hong Kong dollars ($21.4 billion) meaning a sale of Danone's stake could reap around $2.1 billion, based on the latest market prices.