18 June 2010
Egorov Puginsky Afanasiev & Partners advises on the merger of Danone’s CIS business and Unimilk

St Petersburg 18 June - Danone and Unimilk today announced the signature of an agreement to merge Danone’s Fresh Dairy Product businesses in the CIS area with those of Russian company Unimilk. Legal advisers to Danone were Egorov Puginsky Afanasiev & Partners.

Spanning operations in Russia, Belarus, Kazakhstan and Ukraine, the merger covers all dairy products. It will make Danone- Unimilk the leader for dairy products in the CIS area as a whole, and particularly in Russia, where it will account for around 21% of the total market and hold strong positions in high-value, high-growth segments.

Danone’s legal advisers in Belarus, Kazakhstan and Ukraine were member firms of the CIS LCN, a network of leading law firms providing integrated legal advice across the CIS region: Vlasova, Mikhel & Partners (Belarus), Aequitas (Kazakhstan) and RULG (Ukraine).

The new entity will generate annual sales of approximately €1.5 billion* and count over 18,000 employees. It will be chaired by Andrey Beskhmelnitsky, current CEO of Unimilk, while Filip Kegels, current General Manager of Danone Fresh Dairy Products in Eastern Europe and Central Asia, will take charge of operational management.

Danone will control 57.5% interest in the new entity, while the current shareholders of Unimilk will hold 42.5%. The transaction will be carried out principally through a contribution of assets, supplemented with a cash purchase of shares by Danone. Danone’s net financial debt will increase by €1.3 billion principally as the result of the value of the put options which will be granted to the current shareholders of Unimilk. These options will allow them to dispose part or all of their shares in the new entity, Danone being able to hold 100% of these shares in 2022. The operation will be accretive to Danone earnings per share starting in 2011.

This transaction is subject to customary regulatory approvals in the countries concerned. Closing is currently expected to take place towards the end of 2010.

* Proforma 2009

Olga Frolova
Head of Communications
Tel: +7 916 503 2402

About Egorov Puginsky Afanasiev & Partners
Egorov Puginsky Afanasiev & Partners is the leading national law firm in Russia with offices in Moscow, St. Petersburg and London. Founded in 1993, the firm combines extensive emerging markets experience with international professional standards. It regularly represents international companies doing business in Russia and Russian companies going international. The firm regularly acts for the Russian Federation in transactional and litigation matters. The firm also frequently serves as Russian counsel to leading international law firms.

About CIS Leading Counsel Network (LCN)
CIS Leading Counsel Network (LCN) – a professional network of nine leading law firms across the CIS. The network aims to provide integrated legal advice across the region and includes law firms from Armenia, Azerbaijan, Belarus, Kazakhstan, Kyrgistan, Moldova, Russia, Turmenistan and Ukraine. CIS LCN offers clients integrated legal teams, strong resources base and access to unique local knowledge of each of the firms in this dynamic region.

About Unimilk
Unimilk, a privately owned company, is Russia’s second largest manufacturer of dairy products and baby food. Its mission is to raise quality of life through selection of best dairy products. Established in 2002 it unites 28 production plants in Russia, Ukraine and Belarus and 14,000 employees. The Company also sells its products in Kazakhstan. Unimilk owns the leading dairy brand in CIS “Prostokvashino” and has a strong brand portfolio in all market segments. Unimilk’s sales in 2009 amounted to € 1 billion (+7% vs 2008).

About Danone
Danone is a Fortune 500 company and one of the most successful healthy food companies in the world. Its mission is to bring health through food to as many people as possible. Fulfilling this mission is a major contributor to Danone’s continuous strong growth. Danone, with 160 plants and around 80,000 employees, has a presence in all five continents and over 120 countries. In 2009, Danone recorded € 15 billion in sales. Danone enjoys leading positions on healthy food in four businesses: fresh dairy products (n°1 worldwide), water (n° 2 on the packaged water market), baby nutrition (n°2 worldwide) and medical nutrition. Listed on Euronext Paris, Danone is also ranked among the main indices of social responsibility: Dow Jones Sustainability Index Stoxx and World, ASPI Eurozone and Ethibel Sustainability index.