Danone's Voting Rights and Shares: A Deep Dive into the French Giant's Capital Structure

Danone, the world's leading food-processing group, boasts an impressive capital structure that underpins its strategic decision-making and influences its acquisition strategy. As of 31/12/2023, Danone's capital structure comprises a capital of €169,888,497,75, with a total number of theoretical voting rights (gross voting rights) of 1,074,566,448 and a total number of exercisable voting rights (net voting rights) of 1,074,566,448 (Source: Danone's 2023 Annual Report).



Danone's capital structure enables it to invest in growth opportunities, maintain financial stability, attract and retain investors, and form strategic partnerships. The company's significant capital base allows it to allocate resources towards strategic investments, such as acquisitions, research and development, and expansion into new markets. For instance, Danone's acquisition of WhiteWave Foods in 2017 for $12.5 billion was a strategic move to expand its presence in the plant-based foods sector.

Danone's capital structure also influences its acquisition strategy, particularly in relation to its shareholder agreement with Lifeway. Danone initially proposed acquiring the rest of Lifeway for $25 per share in September 2023, which was rejected by Lifeway. Danone later raised its offer to $27 per share, but Lifeway continued to insist that the offer undervalued the business. In November 2023, Lifeway stated that its board was "not opposed" to a potential sale of the company, but the disagreement over the shareholder agreement has prevented any progress in the acquisition process. Danone has warned Lifeway that it is preparing litigation over the breach of the agreement, but Lifeway has maintained its position that the agreement is invalid. This ongoing dispute has likely delayed Danone's acquisition strategy and may require legal resolution to move forward.



Danone's voting rights distribution can also impact shareholder activism, as it influences the ability of shareholders to exercise control over the company's decisions. Danone has a dual-class share structure, with one class of shares (Class A) having one vote per share and another class (Class B) having ten votes per share. This structure can lead to a concentration of voting power in the hands of a few shareholders, potentially limiting the influence of other shareholders. Danone's largest shareholders, such as The Capital Group Companies and BlackRock, Inc., hold significant voting rights, which can exercise more influence over the company's decisions. However, Danone's board of directors and management team engage with shareholders to understand their concerns and address their expectations, which can help mitigate shareholder activism.

In conclusion, Danone's capital structure plays a crucial role in its strategic decision-making by providing the financial resources and stability needed to invest in growth opportunities, maintain financial stability, attract investors, and form strategic partnerships. Danone's voting rights distribution can impact shareholder activism by influencing the concentration of voting power and the engagement between the company and its shareholders. The ongoing dispute with Lifeway over the shareholder agreement has delayed Danone's acquisition strategy, but the company's strong capital structure and strategic vision position it well for future growth.