Danone Acquires Stake In Chinese Baby Formula Maker

French yogurt maker Danone has paid $550 million for a 25 percent stake in Chinese baby formula producer Yashili International Holdings. According to analysts, the investment in Yashili strengthens Danone's association with Yashili's largest shareholder, China Mengniu Dairy Co Ltd., China’s largest dairy firm, whose stake in Yashili will be diluted as a result. The investment also reduces the chance of Danone pursuing other large acquisitions, such as the rumored takeover of Mead Johnson Nutrition Group, which also manufactures baby formula.