France’s dairy giant, Danone, has spent $347 million to purchase an additional 21.75% stake in Morocco’s top dairy company, Centrale Laitiere which controls 60% of the country’s fresh dairy market. The purchase of the additional shares from SNI, the investment firm backed by the country’s royal family, will bring Danone’s stake in Centrale Laitiere to 90.9% as SNI’s stake is reduced to 5%, and marks the second emerging market deal for Danone within four days. As growth in developed markets slows, Danone is one of many Western dairy giants looking to expand into emerging markets. Days before the Centrale Laitaire deal, Danone announced the purchase of a 25% stake in China’s infant formula producer, Yashili, while Fonterra detailed plans for expansion in China’s dairy market which is set to reach $86.3 billion in 2014 and $140.2 billion by 2019. This year China is expected to take 31% of Fonterra’s milk output compared to 19% last year as the company expands in China’s market through both in-country production – planning to have 100,000 cows in-country by 2020, and exports. Arla and Freisland Campina have also announced recent investments in Asian dairy groups.
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