Danone seeks larger holding in Strauss

Strauss Group is resisting overtures from the French firm to take control of its health food subsidiary.

Sources inform ''Globes'' that Groupe Danone SA (NYSE: DA; XETRA; Paris: DANO) wants to increase its stake in the health food subsidiary of Strauss Group Ltd. (TASE:STRS), Strauss Health Ltd. and even acquire the controlling interest. However, Strauss Group wants to keep the current holding structure in Strauss Health unchanged, which is liable to upset the collaboration between the Israeli and French food companies.

The collaboration began in 1969, when Danone acquired a stake in Strauss Dairies Ltd., which began to produce yogurt. In 1982, Danane sold the stake back to Strauss. In 1996, Danone acquired 20% of Strauss Health for $66.3 million. There has been no subsequent change in the ownership structure of Strauss Health, even as the company expanded its business.

The greatest growth by Strauss Health occurred in 1998, when the company acquired half of Yotvata Dairies Ltd. for $32 million. In May 2007, the company acquired Aviv Dairies.

The acquisition agreement included a licensing agreement allowing Strauss to use Danone trademarks and know-how. Danone undertook to provide Strauss Health with technical aid and information about its brand as well as strategic marketing of products.

Danone's request to increase its stake in Strauss Health is not an unusual move, but in line with Danone's strategy to acquire the controlling interest in activities in various countries.

Strauss Group's share rose 1.2% by midday to NIS 38.82.

Published by Globes [online], Israel business news - www.globes-online.com - on November 3, 2008

© Copyright of Globes Publisher Itonut (1983) Ltd. 2008

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