MOSCOW, Nov 26 (PRIME) -- France’s Danone wants to buy Russia’s largest baby food producer Progress, Kommersant business daily reported on Monday quoting industry sources.
A source familiar with data of AC Nielsen told the business daily that Progress accounted for 25% of Russia’s baby food market in annual terms in November, while Danone was the country’s third largest baby food producer this month with 15% of the market. PepsiCo was the second largest producer with a share of 20%, Kommersant reported.
The deal would allow Danone to top the market with a 40% share and have all types of baby food, including fruit and vegetable mixes, the source said.
Progress was previously a part of juice producer Lebedyansky. PepsiCo bought 75.53% in Lebedyansky in 2008 for U.S. $1.4 billion, but production of baby food and mineral water was spun off.
Progress owners started searching for buyers not long after that. In 2011, Nestle was interested in the asset, but the companies failed to agree on the price, which Progress estimated at $485 million. Walnut Capital’s Managing Partner Artyom Motorny told the business daily that the current possible price of Progress may reach 25–35 billion rubles, or $380–530 million.
Danone and Progress refused to comment, while an official in the administration of the Lipetsk Region, where Progress is located, said that he was aware of Danone’s interest in the company but negotiations were at an early stage.
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