Danone: got 3,8 billion INR capital gain in Britannia divestment

Bangalore / IN. (bs) Groupe Danone, the global dairy products major based in France, netted a capital gain of 3,8 billion INR when it recently divested its indirect 25,5 percent holding in the Bangalore-based biscuit major Britannia Industries. Danone and the Mumbai-based Wadia Group in April agreed to end their 13-year-old joint venture for running Britannia Industries for around nine billion INR. The relationship had turned sour during the preceding 18 months owing to a range of issues – intellectual property rights over Britannia´s «Tiger» brand of biscuits, a minority stake purchase by Danone in Bangalore-based nutraceuticals firm Avesthagen, to Danone´s application to the Indian government to do business in India on its own.

Wadia Group and Danone owned 25,48 percent each in Britannia through Associated Biscuits International Holdings (ABIH), a London-based company. This company, in turn, owned 50,96 percent in Britannia. Leila Lands, a Mauritius-based investment firm and wholly-owned subsidiary of Bombay Burmah Trading Corporation, a Wadia Group company, bought out the Danone stake, giving the Wadias complete control.

Industry sources also indicate that along with the settlement to end the joint venture, Danone is understood to have paid out around 200 million INR as royalty over the IPR issue on the «Tiger» brand of biscuits in an out of court settlement. Britannia had earlier stated that Danone registered the «Tiger» brand of biscuits in various global markets without its (Britannia) consent and a legal case was filed in a Singapore court. The «Tiger» brand is among the seven key ones for Britannia and is understood to be accounting for almost eight billion INR of the company´s topline of 38 billion INR.

After this split and settling the IPR issue, Danone is now actively beefing plans to expand its operations in India through a joint venture with Japanese firm Yakult to expand its dairy business, the Indian «Business Standard» reported. This equal joint venture has launched its probiotic health drink Yakult in select Indian markets – New Delhi, NCR, Jaipur and Punjab – and is planning an aggressive foray in other Indian metros soon.