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Deals

Danone to sell remaining 500 million euro stake in Japan's Yakult

LONDON (Reuters) - Danone DANO.PA on Tuesday said it would sell its remaining 6.6% stake in Japanese probiotic yogurt maker Yakult Honsha 2267.T in a move that will strengthen the French food group's balance sheet.

The stake, which analysts estimate is worth about 500 million euros, is what remains after Danone sold most of its 21.29% stake in 2018. Danone is still Yakult’s largest shareholder.

Existing commercial partnerships, including joint ventures in India and Vietnam, will remain in place.

“We see this as a positive and shareholder-friendly move by Danone,” said Jefferies analysts in a note.

Barclays analysts said the sale would help Danone focus expansion of plant-based dairy in Europe and Americas behind its key brands Alpro and Silk, while helping deleverage its balance sheet.

Barclays also said Danone should launch a strategic review of its bottled water business, like rival Nestle NESN.S has, pointing out that the COVID-19 pandemic has hurt sales and profits of a business that was already underperforming.

“Given high investment needs, especially in packaging ... we think a solution is needed for the division to be able to grow in a profitable manner,” Barclays said.

Danone declined to comment on whether it would consider options for its water business.

Danone shares were down 0.5% in Paris.

Reporting by Martinne Geller; editing by Jason Neely

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