LONDON (Brand Republic) – French food group Danone has called off its plans to buy Quaker Oats, just 24 hours after admitting its interest in the US-based cereals and energy drink company.
Danone wanted to buy the company because of the synergies between the two companies’ brands but decided to call off the deal, saying it was not in shareholders’ interests. Danone owns the Evian mineral water brand as well as yoghurt varieties.
The pull-out is a blow to Quaker, which saw Coca Cola withdraw from talks at the beginning of the week because its $15bn takeover plans did not meet the approval of its entire board.
Quaker’s hopes now lie in a renewed bid from Coke’s main rival, PepsiCo. The company is reported to have made a $14.8bn offer earlier this month which was rejected by Quaker directors. Swiss group Nestle has also been mooted as a possible buyer.
The main lure for the high-profile bidders is the Gatorade sports drink brand. Coke’s chief executive Douglas Daft wanted to roll out the brand across its unrivalled global network and take advantage of the growth opportunities in the energy drink sector at a time when the soft drink market is slowing.
The brand could be too good to miss for Nestle, which is looking to beef up its drinks division, which includes Perrier.
Analysts say the Quaker board should think carefully about the price it wants for its portfolio of brands to avoid scaring off any more potential suitors. Some analysts have said the credibility of senior management has been dented, although others have praised their reluctance to back down on the price.
This article was first published on brandrepublic.com