Danone to Cut Costs to Cope With European Woes

Groupe Danone Products.
Balint Porneczi | Bloomberg | Getty Images
Groupe Danone Products.

French food group Danone said it was preparing a two-year cost-cutting plan to save around 200 million euros ($261 million) in Europe to cope with a lasting economic downturn in the region.

The world's largest yogurt group, which faces pressure from U.S. activist shareholder Nelson Peltz to step up cost cuts to improve its margins and share price, said the plan would be combined with ongoing productivity programs.

The plan, whose details were not disclosed, will focus on reducing general and administrative costs for the group and its European subsidiaries and adapting management in Europe, Danone said in a statement on Thursday.

The plan will address management structures and support functions, and it will also be based on voluntary measures, with internal mobility the priority, Danone said.

Last month Peltz, co-founder of U.S. investment firm Trian Fund Management LP, announced he had bought a 1 percent stake in Danone for 310 million euros.

The billionaire businessman, who often wrestles with management at companies he considers undervalued or poorly managed, said Danone's stock had the potential to rise by more than 60 percent to 78 euros by the end of 2014.

Contact Europe News


    Get the best of CNBC in your inbox

    › Learn More*

Europe Video

  • Limor Schweitzer, founder of RoboSavvy discusses the different uses of 3D printing, saying the technology could have a big impact on education and really make robotics "shine".

  • Eamon Javers, Washington Correspondent for CNBC said U.S Secretary of Defense Chuck Hagel's resignation may have appeared a "surprise", but President Barack Obama had known about this situation for a few months.

  • Kate Shoesmith, head of policy at the Recruitment and Employment Confederation, responds to U.K. Labour Party leader Ed Miliband's comments that he will not tolerate rogue employment agencies undercutting wages.