The Hindu Business Line : Wadia, Danone hold talks to break impasse

Mending ties
Both parties likely to meet again in the near future
Danone’s sold biscuits biz to Kraft Foods in July
Wadias opposed Danone stake in Avesthagen

Raghuvir Srinivasan

Chennai, Sept. 3 The Wadias and Groupe Danone seem to have taken a step forward towards resolving their differences over Britannia Industries and associated issues.

The chiefs of the two groups, Mr Nusli Wadia and Mr Franck Riboud, met in London today for discussions which both sides described as “friendly.”

“Discussions were very friendly. Talks are progressing and there’s nothing more to comment at the moment,” said Groupe Danone in a statement.

An identical statement was e-mailed by a Britannia Industries spokesperson from Mumbai.

Danone had originally planned a conference call with a group of Indian journalists, which it later cancelled because “both parties had agreed not to comment to journalists the content of the discussions.”

When asked if this was a signal of an impasse in talks between the two parties, a Danone source refuted it, and harped on the “friendly” discussions that took place.

It is understood that the two parties will meet again in the near future, though no particular dates have been proposed yet.

The meeting between the two at the highest level is the latest in a series of meetings to resolve their differences and has to be seen in the backdrop of the sale of Danone’s biscuits business worldwide to Kraft Foods of the US in July.

India was left out of the deal due to the dispute with the Wadias.

The differences between the partners has resulted in litigation and held up the independent foray of Groupe Danone into the dairy business in India.

The two major issues of contention between them relate to the Tiger brand, owned by Britannia, and the investment by a Danone outfit in Bangalore-based bio-nutrition research Avesthagen in late 2006.

Britannia has alleged that Danone registered the Tiger brand in several foreign countries without its knowledge, something that the latter denies.

The Wadias have also gone to court over the acquisition of five per cent stake in Avesthagen, calling it a violation of the joint venture agreement that Danone signed in the early 90s.

In June, a senior Danone official had hinted to a group of journalists, including this correspondent, on a visit to the Paris headquarters of the company, that the French major was in the mood to offload its stake in Britannia Industries to the Wadias if the price was right.

The Britannia stock rose 3.48 per cent to Rs 1,620.75 on the BSE today in a possible reaction to the talks.