Danone dumps US water business
its troublesome water cooler business in the US, though not without
taking one last hit.
Danone said it would sell its DS Waters business to investment fund Kelso, ending a torrid two-year relationship with the US home and office delivery arm. A fee was not disclosed.
The French firm, which owns top brands such as Evian water and Actimel dairy drinks, had announced in July it was in advanced talks to sell DS waters.
Extra write-down charges from the business, set up as a joint-venture with Suntory Water Group in November 2003, were the main reason for a 62 per cent drop in Danone's profits last year.
A further charge in the first half of this year sent profits crashing from €636m to €445m.
Danone said it would also have to pay another €100m before the end of the year to off-load DS Waters. The group agreed to buy out Suntory Waters to make the deal, adding that DS Waters' annual sales were around €685m ($800m).
Danone said it would maintain its development strategy for water cooler and delivery businesses in other markets, including China, Mexico and Indonesia.