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Danone and Wadia JV may be reaching its end

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In talks for resolving longstanding disputes, French food company Groupe Danone and Wadia group are said to be heading towards dissolution of their joint venture. Danone may offer to exit Britannia Industries and stay out of the biscuit business in India.

The Wadias and Danone hold 50 per cent equity each in Associated Biscuits International (ABIL), which is a major shareholder in Britannia, a forerunner in India’s biscuit market. The agreement was signed in 1992. While Danone is ready to pay compensation to the Wadia group for ending this joint venture, it is looking to pursue its independent dairy and beverage plans in India without participating in the biscuit business. Sources peg Danone’s disengagement price from Britannia, in which it holds 25.5 per cent, to be more than Rs 1,000 crore, but there is no official confirmation. The final talks between the two parties will begin in Paris in the next 10 days.

Prior to that, it is believed that Danone and the Wadias may dissolve their other joint venture, Wadia-BSN. It was set up by the Wadia group and the French company in 1997 to jointly explore business opportunities outside Britannia.

In the past, disputes have centred around intellectual property rights for the Tiger brand of biscuits launched by Britannia some years ago, and also over Danone tying up for a dairy-related venture with a Bangalore-based company, which the Wadias claim violates government guidelines on competing businesses involving joint venture partners.

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