PARIS (Reuters) – French food group Danone said on Wednesday it had no plans to sell any of its three main businesses — dairy and plant-based products, infant formula and bottled water.
A group spokesman made the comments when asked about rumours about a possible tie-up between Danone and non-listed French dairy firm Lactalis.
Lactalis was not immediately available for comment.
When asked during a call with analysts about the Lactalis rumor, Danone CFO Juergen Esser just said: “We are working very actively to fix our under-performing assets. We will update you when there is something new.”
Danone shares were up more than 7% at 0835 GMT, with traders pointing to a media report on merger interest from Lactalis, apart from the group’s stronger-than-expected Q1 sales growth.
In March, Danone new CEO Antoine de Saint-Affrique told investors that “there is nothing wrong” with Danone’s three businesses – dairy and plant-based products, infant formula and bottled water.
He then added the key to stoke sales growth was to improve execution, invest sufficiently behind worthy brands and innovation and part with underperforming assets in those businesses.
About 25% of Danone’s sales come from businesses that were underperforming. “So, we will fix them or sell them,” Saint-Affrique had said.
(Reporting by Dominique Vidalon and Matthieu Protard; Editing by Benoit Van Overstraeten)