The French food group is divesting its stake of nearly 23 per cent in the American kefir producer, abandoning its plans to take over the company.

Danone has agreed to sell its approximately 22.7 per cent stake in Lifeway Foods through a secondary share offering, according to Danish food and agriculture trade publication FødevareWatch, citing Just Drinks. The move brings to a close a troubled period of ownership for the French group.

“We have now entered into an agreement to sell our equity stake in Lifeway Foods. This decision does not change our strategic focus on delivering high-quality plant-based and dairy products to American consumers,” a Danone spokesperson told Just Drinks.

Lifeway has confirmed that 3,454,756 shares are being offered at $19.50 per share, with completion expected on 19 May, subject to customary closing conditions. The company has clarified that it will not receive any of the proceeds from the sale, though it has agreed to repurchase its own shares for approximately $5 million at the same price.

Rejected takeover bids
The divestment is the conclusion of a protracted and contentious ownership. Earlier this year, Danone made two bids — at $25 and $27 per share respectively — in an attempt to gain full control of Lifeway, both of which were rejected by the company’s board, which considered the offers to undervalue the business and characterised them as a “hostile takeover”. The current sale price of $19.50 per share is notably lower than either rejected bid.

By Maja Løvstrup
Source: FødevareWatch