Group Danone may acquire more firms to boost growth

Group Danone may acquire more firms to boost growth

Bloomberg, Paris

Groupe Danone, the world's largest yogurt maker, may step up the pace of acquisitions this year as the French company looks to countries such as the U.S., Russia and Indonesia for growth.

"The 100 million euros (US$129 million) we spent on acquisitions last year might have been an all-time low," Finance Director Emmanuel Faber said over the weekend in an interview.

"We may be able to seize more opportunities in 2005."

Danone, based in Paris, said the U.S., Mexico, Russia, China and Indonesia probably will lead its growth in coming years.

Those countries together now generate between 20 percent and 25 percent of the company's 13.7 billion euros in annual sales, about the same proportion as France, where demand is lagging.

Any acquisitions probably will be small in comparison to Procter & Gamble Co.'s $57 billion plan to buy Gillette Co., Chairman Franck Riboud told journalists.

Danone made five acquisitions last year, including the 22 million-euro purchase of Spain's Montana Azul, a drinks business.

The size of the Gillette acquisition implies that Danone itself is a possible takeover target, analysts said.

The French company, which has a market value of 19.3 billion euros, would prefer to remain independent.

"This group has the means and the ambition to grow independently," Faber said.

"Danone can be bought, yes, but that's up to our shareholders."

Danone shares rose 1.90 euros, or 2.7 percent, to 72.45 euros, a seven-month high, in Paris after the company said per- share profit will advance about 10 percent this year.

Riboud also said he doesn't currently intend to sell Danone's HP Sauce unit, which gets most of its revenue from Britain, or its Bledina baby-food division, which is mainly in France.

"I have strictly no plans to sell them today," he said at a press conference, adding that he may change his mind if circumstances change.

"Our goal is to make them national jewels" rather than global businesses, the chairman said.

Faber also said Danone will continue to repurchase shares at about the same pace as last year, when the company spent 213 million euros acquiring its own stock.

Danone's debt fell to 1.38 billion euros at the end of 2004 from 2.69 billion euros a year earlier.