Danone to Cut Costs to Cope With European Woes
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.