South African firm Clover has agreed to sell its 45 per cent stake in Danone Clover for Rand 1,085m (close to €100m). The deal, announced last week, is still subject to regulatory approval.
Danone Clover was set up in 1998 by Danone and Clover, and has built a leadership position in the South African market for fermented fresh dairy products and desserts.
Over the last 12 years, Danone said that the through the joint venture, the two companies have “re-invented the market”, driving a five-fold increase in yoghurt consumption.
By buying out the joint venture, Danone has signaled its belief that Danone Clover can grow further.
“Taking full control of this joint-venture reflects our ambition as well as the confidence we have in the growth perspectives of this business,” said Bernard Hours, co-chief operating officer of Danone.
Danone said the financial agreement also redefines the collaboration between Danone and Clover through the services Clover will continue to provide in the coming years, notably in the fields of raw milk supply and distribution.
For its part, Clover aims to use the money from the sale of its stake in Danone Clover on investment in its own dairy facilities.
“The funds it will receive from this sale will be put to good use in repositioning its factories and reshaping its distribution facilities, something it wanted to do for some time but was not able to do due to a lack of funds,” said Johann Vorster, CEO of Clover.