Danone agrees to sell Indonesian fresh dairy business

Jakarta-based ICBP announced in an Indonesian Stock Exchange (IDX) filing late last week that it has agreed to buy Danone Dairy Indonesia.

The deal, signed on November 21, will see Indolakto, ICBP's dairy business, acquire 100% of the issued shares in Danone Dairy Indonesia. 

It expects to complete the transaction, which is subject to Indonesian regulatory approval, before the end of December.

It believes the acquisition will better equip it to meet increasing Indonesia demand for milk. 

"Following this acquisition, ICBP will have additional capacity to meet the demand of liquid milk in the western area of Indonesia, as well as strong presence in the dairy industry in Indonesia,"​ said the IDX filing. 

Once signed and sealed, Indolakto will take ownership of all trademarks and industrial designs associated with Danone's popular Indonesian fresh dairy brand, Milkuat. 

Milkuat was launched by Danone in Indonesia in 2004.

The shelf-stable, vitamin and mineral-enriched liquid dairy range is targeted at children aged five to 12.

Milkuat brand vitamin and calcium-enriched milk, launched by Danone in 2004, is designed for children aged five to 12.

Indonesia, with its population of 250m, is the fifth largest market for Danone in terms of sales contribution. 

It accounted for 6% of Danone revenue in 2013.

The proposed Indonesian fresh dairy disposal will likely enable Danone to build on its other interests in the country.

Danone's largest market in Indonesia is water, followed by infant nutrition, fresh dairy, and medical nutrition.