A Russian government foreign investment commission has approved a merger between major milk producer Unimilk and the dairy assets of France's Danone in Russia, Kazakhstan, Belarus and Ukraine, the head of the Federal Antimonopoly Service said.
The new company, Danone-Unimilk will be the dairy market leader in Russia and the CIS with a 21 percent market share.
Danone will control 57.5 percent of the new company, and Unimilk 42.5 percent.
The deal will be done mainly by contributing assets to Danone-Unimilk, but Danone will also pay 120 million euros.
"Danone's investment in production development in Russia will stand at about 15 billion rubles in the first phase," Igor Artemyev said late on Wednesday, adding that the funds would be invested within five to seven years.
The company plans to increase its revenue by 10 percent over present levels within three years. Danone-Unimilk's annual sales will total 1.5 billion euros, and the firm will employ over 18,000 workers.
After the merger, Danone's net debt will increase by 1.3 billion euros, mainly because of the cost of put options offered to Unimilk shareholders. The options give an opportunity to sell part or all the shares of the new company, allowing Danone to increase its stake to 100 percent in 2022.
MOSCOW, August 5 (RIA Novosti)
