Yakult and its largest shareholder, Danone, have scrapped their nine-year old “strategic alliance” in favour of a new, looser agreement to further their “collaborative relationship.”
Last Friday (26 April 2013), Japan-based Yakult and French dairy giant Danone tore up a 2004 collaboration agreement after they were unable to reach a compromise on amendments to the deal.
The parties entered into the agreement in March 2004 with the aim of accelerating their growth in the functional foods sector.
Through the alliance, Danone and Yakult established joint ventures in India and Vietnam, and Danone was permitted to place three candidates on Yakult’s board of directors.
In place of the abandoned 2004 agreement, Yakult and Danone have entered into a Memorandum of Understanding concerning their “future collaborative relationship.”
Danone, Yakult “maintaining their amicable relationship”
“Yakult Honshu Co. Ltd has resolved at the meeting of its Board of Directors held today that the Alliance Agreement between Yakult and Danone (the Agreement) be terminated pursuant to the provisions thereof,” said a statement from Yakult.
The company added that both parties recognise the value of their “joint efforts to promote probiotics and are desirous of maintaining their amicable relationship.”
“Under the Memorandum of Understanding, Yakult and Danone confirm that the two companies will continue to engage in the existing joint ventures, probiotics promotion activities and research activities that have been jointly undertaken by them under the Agreement, and further that Yakult and Danone will undertake any mutually beneficially collaboration in the future.”
The Japanese firm added that Danone will continue to nominate three candidates to sit on its board.
No “commitment or limitation” on Yakult interest
The 2004 agreement also included a clause prohibiting Danone from increasing its 20% stake in Yakult. In its statement, Yakult confirmed, however, that Danone’s “obligation under the Agreement not to increase its shareholding ration in Yakult has lapsed upon termination of the Agreement.”
Yakult and Danone initially agreed on a 5-year shareholding cap in 2004. This was extended by a further three years. Since it expired in May 2012, rumours regarding Danone’s intentions towards Yakult have been rife.
In a statement announcing the new agreement, Danone said that this condition was no longer necessary.
“Given the relationship of trust built up over the years, this framework does not contain commitment or limitation regarding Danone’s equity interest in Yakult,” said Danone.
“Through this new cooperation framework, which opens a new stage in their cooperation, Danone reaffirms its status as a major shareholder and long-term partner of Yakult,” the company added.