Fight for Quaker goes transatlantic

Quaker: could help Danone in its global expansion plans

Quaker Oats, the stalwart US foods firm, may see its ownership cross the Atlantic, after French-based Danone became the latest company to voice takeover plans.

Danone, famous for its yoghurts and Evian water, said on Wednesday that buying Quaker would accelerate the Paris-based firm's development into a world leader in the drinks and health foods sectors.

The announcement came hours after Coca-Cola became Quaker Oat's latest suitor to pull out of takeover plans.

Earlier this month, Coca-Cola's arch-rival PepsiCo reportedly made a $14.8bn offer which was rejected by Quaker directors.

Shares slide

In Paris, concern over the takeover saw Danone shares fall 12.30 euros to 148.70 euros in mid-afternoon trading on Wednesday.

Fredinand Schumacher: the "Oatmeal King"

Analysts fear the deal could damage Danone profits for up to three years.

The takeover would return Quaker, manufacturer of cereals such as Sugar Puffs and the popular US sports drink Gatorade, to a European root.

The firm was founded 99 years ago from a merger of three businesses including the German Mills American Oatmeal Company set up by "Oatmeal King" Ferdinand Schumacher.

Late-night meeting

Coca-Cola ditched its $15bn takeover plans after a lengthy board meeting on Tuesday.

Directors of the drinks giant later took the unusual step of expressing their "enthusiastic support" for chairman and chief executive Douglas Daft, who had reportedly backed the Quaker purchase plans.

Coca-Cola stock fell 10% in two days after the firm's interest in Quaker was announced over fears that the proposed bidding price was too high.

Coca-Cola board member Warren Buffet, the investment guru who built his fortune around a strategy of following blue chip companies dominant in their sector, was wary of the plans, newspapers said.

Shareholder value

In their two-sentence statement, directors said that Mr Daft's business strategy represented "the best means for enhancing shareholder value".

Since being appointed Coca-Cola chief in February, Australian-born Mr Daft, has overseen a cut of 5,200 staff, the largest in the firm's history.