The Danone alliance — and unwinding it sixteen years later (2004)

Taking a foreign company as your largest shareholder, and letting it go

The starting point of this alliance was less a mutual choice between equals than a response to unwelcome share buying. Danone kept accumulating stock after talks broke down in 2000 and, by 2003, had closed in on being the largest shareholder. Yakult absorbed that pressure with two instruments: a share-buyback authorisation as a defence, and the strategic alliance signed the following year. Receiving a company that keeps buying your shares as a formal partner can be read as an attempt to bring the tension over control under management while drawing out the resources of globalisation — a European network, joint research. The character of an alliance that kept searching for balance between hostility and cooperation runs strongly through these sixteen years.

What decided the ending was less Yakult’s circumstances than Danone’s own change. Carrying debt swollen by an American acquisition and facing activist demands, Danone downgraded the alliance to a memorandum in 2013 and disposed of its shares in two stages, in 2018 and 2020. Not many companies take one of the world’s largest dairy groups as their largest shareholder and are neither swallowed nor merged, recovering their independence as the other side withdraws. The weight of holding a foreign company as a major shareholder — and the meaning of the choice to keep the joint ventures and research cooperation even so — still leaves room for reflection at a Yakult whose earnings now come chiefly from abroad, twenty years on from that first share purchase.