* Pays 550 mln eur to hike Centrale Laitiere stake to 67 pct
* Says deal is key step in development in Morocco
* CEO sees 1 bln eur sales from North African countries (Recasts with traders comment, background, adds bylines)
By Elena Berton and Souhail Karam
RABAT/PARIS, June 27 (Reuters) – French food group Danone has agreed to pay 550 million euros ($685.14 million) to take control of Morocco’s top dairy firm to broaden its presence in North African markets amid weakening sales in southern Europe.
Danone will pay a 34 percent premium above Centrale Laitiere’s stock price to raise the 29.2 percent it has been holding since 2001 to 67 percent, according to a statement from the seller, National Investment Co (SNI).
The deal is expected to be finalised before the end of this year, the two companies said.
“The move … confirms the strategic appeal of markets in North Africa for Danone,” Danone said in a statement.
In an interview published on the website of French daily Les Echos, Chief Executive Franck Riboud said North Africa would become the group’s “new frontier” in coming years.
“Grouping together Morocco, Algeria, Tunisia and Egypt, we will generate 1 billion euros of total sales, of which 900 million from fresh dairy products,” Riboud told the newspaper.
In addition to fresh dairy products, Danone plans to sell baby food and medical nutrition products in North Africa, he said. The acquisition is expected to be finalised by the end of 2012.
Centrale Laitiere is Morocco’s main dairy product company with nearly 60 percent of the market and annual sales of 600 million euros. It also operates Morocco’s largest distribution platform, with 30 storage hubs serving 70,000 retail outlets.
Earlier this month, Danone warned of a hit to profit this year after Spanish consumers switched to cheaper yoghurts and as milk prices rose, causing growth at the Actimel and Activia maker to stall.
The world’s largest yoghurt maker said demand had fallen sharply in Spain and Southern Europe as the euro zone debt crisis deepened.
In 2011, Centrale’s sales rose 7 percent to 6.6 billion dirhams but its net attributable profit fell 20 percent to 458 million dirhams, its lowest since at least 2007, in what traders linked to lower demand and higher input and advertising costs.
Some traders at the Casablanca bourse thought Danone paid a too hefty price to seal control for the strategic transaction.
“It (34 percent) is intriguing. A 15-20 percent premium would have been more in line with Centrale’s growth prospects,” a senior trader said.
Another trader said a gradual liberalization of trade with the EU and Rabat plans to axe state subsidies for fuel and sugar, and will add to pressure Centrale has been facing from homegrown players that reduced its market share to 60 percent from 80 percent in the 1990s.
“Dairy consumption per capita in Morocco is very low but its growth is equally slow … The market for high-added value dairy products is tiny but it is growing fast,” said the trader.
SNI, an investment vehicle controlled by Morocco’s royal family, said it would lower the 25.6 percent stake it will be left with in Centrale by selling an unspecified amount of shares directly in the Casablanca bourse.
The deal with Danone marks SNI’s second move in what is expected to be a series of transactions involving its stakes in the country’s biggest lender, AttijariWafa Bank and Morocco’s sole sugar refiner, Cosumar.
SNI, which is also involved in partnerships with French firms including Lafarge, ArcelorMittal and Renault , plans to focus its future growth strategy on other sectors such as tourism, telecoms and renewable energies.
($1 = 0.8028 euros) (Reporting by Elena Berton and Souhail Karam; Editing by William Hardy, Matthew Lewis and Bernard Orr)
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