Global food company Danone has finalised the sale of its 9.8% stake in China Mengniu Dairy Company.

This March, Danone decided to convert its indirect stake in dairy manufacturer Mengniu into a direct holding as part of its divesture plan.

For this stake conversion, Danone reached an agreement with COFCO Dairy Investments (CDI).

Danone said that the disinvestment in the Chinese dairy company was part of its portfolio review process.

It may divest its direct holding in Mengniu this year in one or more transactions based on market conditions.

In 2013, Danone acquired a stake in Mengniu, a Hong Kong Stock Exchange-listed firm.

With the finalisation of the Mengniu stake sale, the transaction resulted in total gross proceeds of $1.9bn (HK$15.4bn).

Danone said that the settlement of the transaction will take place on 17 May 2021.

In line with Danone’s capital allocation, the majority of the proceeds will be returned to shareholders through a share buyback programme.

The food company said that it will disclose details of the programme once it is initiated.

In another development in the US, fresh egg producer Cal-Maine Foods has agreed to acquire the remaining 50% membership interest in Red River Valley Egg Farm from Rose Acre Farms for $48.5m.

Red River Valley Egg Farm owns and operates a speciality shell egg production complex with nearly 1.7 million laying hens near Bogata, Texas, US.

Completion of the deal is subject to customary closing conditions and is expected to take place by the end of this month.

Upon completion of the deal, Red River Valley Egg Farm will become a wholly owned subsidiary of Cal-Maine Foods.