The Hindu Business Line : Danone stake sale talk boosts Britannia stock

Mumbai June 21 The stock of Britannia Industries Ltd rose over 3 per cent on the BSE today on news that French-based Groupe Danone may sell its stake in the biscuit company.

The Mumbai-based Wadia family and Groupe Danone hold about 25 per cent stake each in Associated Biscuit International Holdings, whose subsidiary, Associated Biscuits International Ltd (ABIL), has a controlling stake in Britannia Industries Ltd.

"There are reports that Danone is keen on independent operations in India, which is why they're exiting the joint venture. The Wadias stand to get a lot of money if Danone exits, which is why the stock has responded positively," said a research analyst.

Relations between Danone and the Wadia group have been rocky since last year when the Wadia Group took Danone to Court over the French firm's stake in biotech firm Avesthagen, which the Wadias said violated a non-compete clause in their joint venture agreement.

Earlier, the two companies had a dispute over a licensing agreement with Britannia's top-selling Tiger brand biscuit.

Shares of Britannia closed at Rs 1,518.25, up Rs 46.45 or 3.16 per cent on the BSE. The total traded quantity of shares was 2217.

"The stock is expected to continue to be traded at these levels. There is scope for further growth for Britannia in this growing biscuit industry," said the analyst.

On the NSE, the stock gained 3.53 per cent to close at Rs 1470.30, with over 20,000 shares changing hands.

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