Danone Gives Up China Formula Brand for Larger Mengniu Stake

Danone plans to sell the Dumex Chinese infant formula brand to a unit of China Mengniu Dairy Co. amid a downturn in demand for locally-made baby-food in that market.

Danone has agreed to sell Dumex to Yashili International Holdings Ltd., and will use the proceeds from the sale to take up more shares in Mengniu, a state-linked milk producer, the two Chinese companies said in a combined statement Friday. The Paris-based food company separately said it took an impairment charge of 398 million euros ($437 million) as it revised Dumex’s sales prospects lower.