Major French food maker Groupe Danone said Wednesday that it will turn its Japanese dairy products joint venture into a wholly own unit by acquiring all the shares from its partners, Calpis Co. (TSE:2591) and Ajinomoto Co. (TSE:2802).

The move comes as Danone attempts to fortify its dairy products operations in Asia while Calpis and Ajinomoto unload their noncore businesses.

Calpis Ajinomoto Danone Co. (CAD) began as a 50-50 joint venture between Danone and Ajinomoto in 1980 before taking its current form in 1992. Danone owns a 50 per cent stake in CAD, while Calpis and Ajinomoto hold interests of 30 per cent and 20 per cent, respectively. For the fiscal year ended Dec. 31, 2005, CAD posted sales of 21 billion yen (US$ 172.5 million).

In tandem with the stock acquisition, Danone will also buy the land, buildings and equipment at Calpis' Gunma Prefecture plant, which had been leased to CAD.

Although the property purchase price was not disclosed, Calpis is expected to book an extraordinary profit of 1.9 billion yen for the year ending December 2007. Meanwhile, Ajinomoto will book an extraordinary profit of more than 400 million yen from the deal for the year through March 2007.

Danone plans to change the company's name to Danone Japan and boost the firm's domestic chilled-dairy-products business, including its Bio line of yogurts. Ajinomoto will remain the Japanese distributor, and Calpis will continue to supply raw ingredients.

February 1, 2007