Danone ditches Quaker talks

Danone no longer thinks Quaker is good value

French food group Danone has called off talks to buy Quaker Oats, just one day after declaring its interest in the US company.

Danone, famous for its yoghurts and Evian water, had said that a takeover would accelerate its growth into a world leader in the drinks and health foods sectors.

But by Thursday, it said the financial terms of such a deal would not be in shareholders' interests.

Earlier this week, Coca-Cola ditched its $15bn plans to take over Danone, amid concerns the price tag was too high.

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

Shares rebound

Shares in Danone jumped on the news, having slumped on Wednesday when news of the talks emerged.

Fredinand Schumacher: the "Oatmeal King"

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

"Despite the strategic and operational logic of a possible combination with Quaker Oats, Danone Group has decided that the financial terms of such a possible acquisition would not be in the best interests of its shareholders nor consistent with its stated strategy of creating shareholder value," Danone said in a statement.

The takeover would have returned Quaker, manufacturer of cereals such as Sugar Puffs and the popular US sports drink Gatorade, to its European roots.

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.

Coca-Cola out

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.