The deal provides that the French food group will sell to its former Chinese partner's share of 51% stake in the joint venture Danone -Wahaha.
"The execution of the agreement will terminate all legal proceedings relating to the dispute between the two sides," Danone said in a statement.
A source familiar with the matter told Reuters that the deal will yield about 300 million euros in the French group is slightly less than the 350 to 380 million euros in first half of 2009 in the accounts of Danone.
Danone declines to comment on this subject.
In exchange, the action Danone, which had closed on a fall of 2.07% Friday, opened on Wednesday a rise of about 3%. Around 10:30, she gained 1.26% to 41.01 euros.
For analysts, this recovery primarily reflects the relief caused by their rejection Tuesday by the group to rumors that he might make a bid for Mead Johnson, the U.S. subsidiary of Bristol Myers specializes in infant feeding.
THE END OF A LONG ROAD TO CROSS
"The market was concerned that Danone did not have the means to acquire Mead Johnson whose enterprise value is around nine billion dollars. In addition, a transaction of this magnitude would contradict what the group said at the time of its capital increase that it did not achieve big deal, "said one analyst on condition of anonymity.
In last May announcing the lifting of three billion euros of fresh money, Danone had said that the aim of the operation was to reduce a debt exceeding 10 billion euros at the end of 2008 and be able to seize external growth opportunities in its businesses.
According to one analyst, the transaction with Wahaha however little impact on the title because she already weighed more heavily on him. He nevertheless considers that the news is positive because it represents "the end of a long cross to bear" even if the transaction is expected to be dilutive by 1.5% to 2%.
The French had accused the giant Chinese beverage having not complied with the non-compete clauses specified in their original contract amount, along with 39 legal structures of the joint venture, a network of more than 60 factories and distribution companies producing and selling, they also drink under the Wahaha brand.
Rejecting the charges, Hangzhou Wahaha Group ensured that Danone had validated the assembly of this parallel circuit, because he did not have structures in geographical areas where the market seemed limited.
Commenting on the agreement signed Wednesday, Franck Riboud, Chairman and CEO of Danone, said in the statement that "commitment" of his group in China "is a long-term." He adds that his presence in this country dates back to 1987 and wishes to "accelerate the future success of (its) activities in China.
For its part, Zong Qinhou, president of Wahaha Group said that "China is an open country and the Chinese people are open minded. The Chinese companies are willing to cooperate and grow with other world leaders on the basis equitable relationships and mutual benefit ". ( Danone and Wahaha signed an agreement to end partnership )
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