Danone interested in Numico?

- Last updated on GMT

Related tags: Danone, Nutrition, Vitamin

Dutch nutrition company Numico is struggling to stay afloat at the
moment, but rumours in the Dutch press suggest French dairy giant
Danone could be interested in a bid. An odd choice for the French
company which has been streamlining its business in recent years.

Shares in Dutch baby food and vitamins group Numico rose sharply last week following rumours of a possible bid from French dairy, biscuits and bottled water group Danone.

Numico has been struggling recently, and its shares had plunged as a result of the dismissal of its US chief and its chief financial officer. But the rumours of a bid from Danone, reported in Dutch newspaper NRC Handelsblad​, helped the shares rally late on Friday.

Neither Numico nor Danone have commented on the rumours, but a bid from the French group would be an odd choice at a time when the dairy giant has been steadily divesting all its non core businesses to focus on its core Danone dairy, LU biscuit and Evian/Volvic water brands.

While the baby food and clinical nutrition businesses owned by Numico could potentially be of interest to Danone - many dairy groups are active in the baby food sector, such as Campina or Nestlé - the vitamin arm of Numico is less likely to fit with Danone's existing business.

But with Numico in such a weak financial situation at the moment, any bid from Danone seems unlikely, even it could find a buyer for the vitamin unit. Numico has been hit by the weak market for dietary supplements in the US, and in November it said full-year 2002 earnings before interest, tax and amortisation (EBITA) would be between €420-440 million, down from €667 million in 2001.

Related topics: Manufacturers, Danone