The largest dairy manufacturer in the world, Danone SA, revealed in an official statement on Friday that it intends to keep its medical-nutrition operations, after spending several months in negotiations with eventual buyers. The companys decision triggered speculations that the France-based company could be considering a larger deal on the way to its goal to bring back its growth.
The Chief Executive Officer of Danone, Emmanuel Faber, said in a statement, cited by the Wall Street Journal: “…Each of our core businesses—fresh dairy products, waters, early life nutrition and medical nutrition—has a role to play in living up to our mission and achieving the profitable, sustainable growth that is an integral part of our strategy.”
According to Danone, all of its divisions will play an important role in its future strategy that is to be build after a board review of the companys outlook. People with knowledge of the situation said that the dairy maker was having a meeting this week in order to discuss a potential sale of its medical-nutrition unit. The company was also reported to be considering a sale of its stake in Yakult Honsha Co., which is based in Japan. Danone has been recently trying to ensure its long-term growth, which is the reason why it has been considering a potential sale of the unit.
The CEO Faber confirmed that the medical-nutrition division, which is one of the four major units of Danone, was a key part of his strategy. As reported by the Financial Times when Mr. Faber took over the position 10 weeks earlier, he said: “I reiterate my commitment to the four businesses at Danone. These four business lines have tremendous potential.”
Danone SA lost 2.83% to close at €53.84 per share on Friday, marking a one-year increase of 4.65%. The company is valued at €35.74 billion. According to the Financial Times, the 27 analysts offering 12-month price targets for Danone SA have a median target of 55.00, with a high estimate of 65.50 and a low estimate of 44.00. The median estimate represents a 2.15% increase from the last price of 53.84.
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