NORTHFIELD, Ill., July 3 (UPI) -- Oreo cookies maker Kraft Foods Inc. said Tuesday it made a binding offer to buy the cookie operations of French food giant Group Danone SA for $7.2 billion.
As required by French law, Danone must consult with its local "shop floor" works council before entering into a definitive agreement, Kraft said. Both companies anticipated the transaction would close by the end of the year.
The cash deal includes Danone's biscuit brands -- including LU, Tuc and Prince -- and operations and assets in 20 countries.
Without the cookies, Danone's portfolio includes healthier products including Dannon yogurt and Evian bottled water that Wall Street analysts say have promising sales growth.
Kraft said the acquisition would expand its operations and reach into "critical emerging markets" such as China and Russia, where Danone is a market leader.
Danone's Paris headquarters would remain open "for the foreseeable future" and all current factories would remain open for at least three years after the sale is completed, Kraft said.
Biscuits General Manager Georges Casala will also remain, Kraft said.
Sales in Danone's biscuits-and-cereal unit were $2.9 billion last year, down from 2005's $3.2 billion.
