Even as US-based Kraft Foods has entered into a deal to acquire the global biscuit business of Groupe Danone, the arrangement does not include Groupe Danone's stakes in biscuit businesses in India and Latin America.
In India, Danone holds a 25.5 per cent stake in market leader Britannia Industries through holding company Associated Biscuits International Holdings.
Groupe Danone could not include the Britannia stake in the ¤5.3 billion ($7.2 billion) deal with Kraft because the Wadia group, Danone's Indian joint venture partner, is believed to hold the first right of refusal to it.
At the same time, the deal with Kraft could add a new twist to the intellectual property row over the use of Britannia's Tiger brand by Groupe Danone's biscuit business.
While Groupe Danone executives on Tuesday reiterated that the company does not sell under the Tiger brand in any country except India, Groupe Danone chairman Franck Riboud said at a press conference in Paris that he would meet the Wadias in late August or early September to sort out the issue.
The Wadias had charged Danone with using and registering the Tiger brand in several countries outside India without Britannia's consent.
The Wadia group said, "Any comment at this stage is pure conjecture as the arrangement between Groupe Danone and Kraft Foods has no relevance to Britannia Industries and the Wadias."
Britannia executives were unavailable for comment.
Last month, Groupe Danone had indicated that it was exploring several options including exiting the biscuit business in India in a bid to resolve disputes with the Wadias.
At present, Danone and the Wadias are in discussions to resolve their differences, a move that will pave the way for Danone entering India on its own, to start a full-fledged fresh dairy and beverages operation.
Meanwhile, Financial Times quoted Riboud as saying that the sale of the biscuit business to Kraft would allow the group to concentrate on its two other divisions, which focus on dairy products and mineral water and are more in tune with healthy eating trends.
According to a statement by Kraft, French law requires Danone to consult with its works council prior to entering into a definitive agreement. Both companies anticipate that the transaction will close by the end of the year.
"This proposed acquisition makes great sense for Kraft," said Irene Rosenfeld, chairman and CEO, Kraft.
"It will increase our presence in snacks -- our fastest growing global segment -- and transform our international business. This growing, high-margin business will give Kraft another core growth category in Europe, a cornerstone for faster growth in emerging markets, and the best portfolio of iconic biscuit brands in the world."
The acquisition encompasses Danone's market-leading biscuit brands -- among them LU, Tuc and Prince -- and operations and assets in 20 countries including 36 manufacturing facilities.
Kraft reported full year net revenue of $34.4 billion in 2006, and has a market cap of $57 billion.
Groupe Danone's combined revenues in 2006 were Euro 14 billion, of which the biscuits business delivered a revenue of Euro 2.4 billion.