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.
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.
The French company, whose brands include Actimel yoghurt and Evian water, said the sale would take place via an accelerated bookbuilding process.
Former Danone boss Emmanuel Faber was abruptly ousted as chairman and CEO earlier this year following clashes with some board members over strategy and calls from activist funds for him to resign over the group's lackluster returns compared with some rivals.
French business paper Les Echos reported this week that Antoine de Saint-Affrique was the frontrunner to be named as Danone's new CEO. Danone declined to comment on that report.