Kraft Foods
1) Indian unit out of Kraft Foods deal
Section- India Business
4 Jul 2007, 0027 hrs IST,TNN
Source: TNN
MUMBAI: French food giant Groupe Danone is in exclusive talks with Kraft Foods, the world's largest cookie maker, to sell its biscuits and cereal making unit for $7.2 billion in an all cash deal. The caveat, is that Group Danone's ventures in India and Latin America is not part of the deal.
Britannia Industries in India, of which Group Danone is a co-promoter with the Wadia family, are involved in a long running feud. And Danone, sources close to the development said, wants to exit the joint venture. Both partners are in the middle of settlement talks to resolve the dispute, sources said.
They added that these talks are based on a proposition: Danone will get into a non-compete agreement with its Indian partner. If the agreement goes through, Danone, after exiting the joint venture, will not dabble with the biscuits business in India. Both Group Danone and the Wadia group hold a majority stake in Britannia through a holding company, Associated Biscuits Holding International, UK.
Sources pointed out that Group Danone is keen to complete talks with their partners and end the relationship at the earliest. That will allow the company to focus on its Indian operations - a country that Danone has identified as its future hub for operations in Asia.
A Wadia group spokesperson said, “Danone's discussions with Kraft Foods over the sale of their biscuits and cereal products business exclude India and Britannia and therefore has no relevance to Wadia Group.” The Euro 14 billion company has initiated arbitration proceedings to end its partnership with the Wadias. Last week, it has filed a petition in the Bombay High Court and made Kalabakan Investments, the holding company of the Wadia group, a party to the case.
Kalabakan and Danone hold equal stakes in...
View Full Essay