Danone says no decision on priorities for external growth

Paris

French foods group Danone SA said on Sunday it was not conducting a strategic review of assets and had not decided on any priority in terms of possible external growth possibilities.

The maker of Activia yoghurt and Evian water made the comments after sources familiar with the matter told Reuters on Friday that Danone had decided it wants to pursue a takeover of US infant formula maker Mead Johnson Nutrition Co.

Danone had declined to comment on the story on Friday, but in an e-mail to Reuters on Sunday, Laurent Sacchi, Danone's group secretary, said Mead Johnson was "absolutely not discussed" at Danone's Oct 17 board meeting.

However he did not specifically comment on whether Danone was or could be interested in Mead Johnson. "No decision has been made on what the priorities are in the group's external growth programme at that board meeting nor in previous ones and there is no strategic review under way,"Mr Sacchi said.

Paris-based Danone has been grappling with falling earnings and some investors have questioned whether the company can thrive in its current form as it competes with larger rivals Nestle SA and Unilever Plc.

The group has said it is working on a plan to ensure long-term growth known as Danone 2020, but has repeatedly denied this included a review of assets involving major deals.

The plan, outlined to analysts at a June seminar in New York, mainly entails organisational changes to simplify and accelerate decision-making and adapt to competition, notably in Europe, plus the centralisation of procurement to reduce exposure to dairy price volatility.

With regard to Mead Johnson, the sources did not say whether Danone had made any approach to the company or hired any advisors. Mead Johnson declined to comment.

REUTERS