Protecting Danone
Due to its narrow focus and relatively small size, Danone is potentially an attractive takeover target for its competitors, namely Nestlé and Kraft Foods. In mid-July 2005, the share price of Danone rose 20% within two weeks on rumours of a bid approach by PepsiCo, although this intention was denied. Upon realising that a takeover of a national treasure such as Danone by a foreign company was indeed possible in the capital markets, the "economically patriotic" French government stepped in by drafting a law to protect companies in "strategic industries" such as Danone from takeover. This has been dubbed the "Danone Law".
Speculation was renewed once again in mid-2006, when PepsiCo declared its intention to grow significantly in France through a sizeable non-hostile acquisition, and Kraft was also reported in Le Figaro, a French daily newspaper, as not having ruled out an acquisition on French soil. The stock market apparently marked down the possibility of a bid by PepsiCo following Danone's acquisition of Numico.
Read more about this topic: Groupe Danone
Famous quotes containing the word protecting:
“Never has any one been less a priest than Jesus, never a greater enemy of forms, which stifle religion under the pretext of protecting it. By this we are all his disciples and his successors; by this he has laid the eternal foundation-stone of true religion; and if religion is essential to humanity, he has by this deserved the Divine rank the world has accorded him.”
—Ernest Renan (1823–1892)