* Buys 49 pct stake in west African frozen dairy group
* Fan Milk had 2012 sales of around 120 mln euros
* Deal comes as Danone faces problems in China, weak Europe
By Dominique Vidalon
PARIS, Oct 24 (Reuters) - Danone is buying a 49 percent stake in Fan Milk International, a frozen dairy products and juices maker in west Africa, it said on Thursday, speeding up expansion in new markets amid sluggish growth in Europe and problems in China.
The deal with Dubai private equity firm Abraaj Group and whose terms were not disclosed, comes after Danone, the world’s largest yoghurt maker, last year paid 550 million euros to take control of Morocco’s top dairy firm Centrale Laitiere.
The Abraaj Group will initially retain 51 percent of Fan Milk, whose 2012 sales rose 16 percent to around 120 million euros.
Under the deal Danone will in coming years gradually buy a controlling stake in the business, the statement said. The transaction is expected to be finalised by the end of 2013.
“Danone is already present in North and South Africa, and we will now be able to develop the dairy product market in West Africa , the statement quoted Emmanuel Faber, Danone Co-Chief Operating Officer, as saying.
“Africa is becoming a major expansion axis for Danone and it will tomorrow be an important growth booster,” CM-CIC analysts said in a note.
Danone generates an estimated 700 million euros in fresh dairy product sales in North Africa, which compares with group dairy product sales of 11.7 billion euros in 2012.
Last week Danone said it was taking longer than expected to recover from an Asian recall of high-margin infant formula and cut its sales, profitability and free cash flow goals for 2013.
Established over 50 years ago, Fan Milk currently operates in Ghana, Nigeria, Togo, Burkina Faso, Benin and Ivory Coast.
Nigeria and Ghana are its main markets, making about 80 percent of its turnover. Fan Milk commands a market share of 85 percent and 89 percent, respectively in these two countries. (Reporting by Dominique Vidalon; Editing by Mark Potter)