Mey Eden (Eden Springs) today announced that its European subsidiary had signed an agreement to create a joint venture with French food maker Groupe Danone for the delivery of large drinking water bottles across Europe.
The announcement came as sources informed “Globes” that Danone would buy 20% of Mey Eden (Eden Springs) at a $400 million company value, 185% above market.
Mey Eden shares were up 27% at NIS 62.30 in late afternoon trade on Wednesday.
Initially, Groupe Danone will hold a 53.2% stake and 50% of the voting rights in the new company, which will deliver bottled water and dispensers to homes and offices (HOD) in 18 countries.
Mey Eden said in a statement to the TASE that Danone would buy another 5.5% stake in the joint venture for €38 million.
The deal also gives Danone the option to acquire 100% of the company from January 1, 2008.
The joint venture will have the widest geographical coverage in the sector, the two companies said in a statement. The venture will have number one positions in 11 countries, including France, Spain, Switzerland, Finland, Norway and Sweden; and strong local positions in Germany, UK, Italy and Poland. It will operate more than 350,000 coolers and will hold a 20% share of the European market.
The joint venture will be based in Lausanne, Switzerland, and managed by Mike Hecker, currently general manager of Eden Springs Europe. Created 5 years ago, Swiss-based Eden Springs is a wholly owned subsidiary of Tel Aviv-listed Mey Eden.
Drawing on the combined strength and experience of the two groups, the new organization will be in a position to rapidly develop its HOD activities to their full potential, in the most dynamic segment of the European bottled water market, Eden Springs and Danone said.
Mey Eden recently announced that its loss widened to NIS 72.5 million in 2002, from NIS 63 million in 2001. The company’s European operations lost NIS 110 million last year, on sales of NIS 290 million.
Groupe Danone is the world leader in the HOD market, with number one positions in volume in America and Asia, while Eden Springs had become a major player in Europe, the companies said.
“Drawing on the combined strength and experience of the two groups, the new organization will be in a position to rapidly develop its HOD activities to their full potential, in the most dynamic segment of the European bottled water market,” the companies added.
Published by Globes [online] - www.globes.co.il - on 10 April, 2003