Eden Springs Ltd. (Maayanot Eden) (TASE: MEYD) is buying out Groupe Danone (Paris:DANO) in their joint venture, Danone Springs of Eden BV. The move may explain the 12% rise in Eden Springs’ share on Sunday and Monday.
Danone Springs of Eden was established in 2003 to provide mineral water. Groupe Danone owns 59% of the joint venture. Groupe Danone later acquired 20% of Eden Springs. Eden Springs will pay €86 million for Groupe Danone’s 59% holding in Danone Springs of Eden and will pay an additional €10 million for Group Danone’s stake in Eden Springs itself. The company said it would finance the purchases with bank credit, and was negotiating with banks for this purpose.
The deal gives Danone Springs of Eden a company value of €210 million - 70% less than the €690 million at which it was launched four years ago.
Eden Springs said that it decided on the buyout because Groupe Danone wanted out of the venture. Eden Springs added that it views Danone Springs of Eden as a platform for “expanding its business overseas by leveraging the company’s know-how and managerial ability accumulated from its multinational activity over the years.”
Danone Springs of Eden became profitable in 2006.
Published by Globes [online], Israel business news - www.globes.co.il - on May 8, 2007
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