But Danone is continuing to invest in one of its eastern subsidiaries, increasing its stake in the Chinese company Bright Dairy & Food Co. to 7.7 per cent.
WBD's confirmation that talks with Danone have broken down is the latest development in a lengthy negotiation period which began two years ago with Danone's acquisition of a minority stake in the firm.
The French group has been cagey about its plans for WBD, saying only that it hoped to increase its share of the increasingly important Russian dairy market to around 20 per cent over the next few years. But WBD has twice this year confirmed that talks were ongoing between the two companies.
A report in the Financial Times newspaper suggested that Danone was still interested in acquiring the company but that the two aprties had been unable to agree a price. Rumours of disagreement over the valuation of WBD have been circulating for several months.
A takeover of WBD would be by far the simplest means for Danone to achieve its stated aim of taking a greater share of the Russian market, and all the signs suggest that the French group is still prepared to negotiate. The problem appears to be WBD's intransigence over the future of the group in Danone's hands - in particular whether management will be retained and which parts of the increasingly sprawling WBD empire will be sold off.
Despite its own diverse portfolio, which includes both dairy products and bottled water, Danone is thought unlikely to want to keep WBD's water unit, concentrating instead on the core dairy business.
Meanwhile, Danone's Singapore-based unit Danone Asia has increased its stake in Bright from 3.85 per cent, acquiring an additional 3.85 per cent from the Shanghai government agency that oversees state assets held by the municipality for 121 million yuan.
Danone's first investment in south east Asia came in 1980, with a joint venture to make and market fresh dairy products in Japan. Today, the group is established in eight Asian countries, with 18 companies and three franchise operations. Its sales there are around €1.9 billion.