Then in February SpicyIP reported on how legal proceedings were due to start in a weeks time. Now in July there are several media reports that the Wadias maybe looking for an out of court settlement of the dispute by assuring Danone that the doors were still open for talks. Clearly this is one marriage that is not going to end soon.
However there seems to be more to this story than meets the eye. Last year Danone was seeking to enter the Indian market independently but could not do so because Indian law (Press Note 1) forbid foreign companies, who were already present in the market through a JV with an Indian company, from entering the Indian market without the prior permission of their Indian partners. Media reports last year indicated that neither were the Wadia's willing to give their approval for Danone to enter the market independently and nor were they moving fast to dissolve the JV agreement. As a result Danone was getting increasingly frustrated.
However last week there were media reports that the Government was planning to scrap Press Note 1 therefore allowing foreign companies like Danone to enter the Indian market without the approval of the Wadia group. Danone's entry would mean a new competitor in the market thereby cutting into Britannia's profits and at the end of the day this maybe the factor behind Wadia's recent reconciliation moves.
At the end I must add that the reason that I've given behind Wadia's reconciliatory moves is merely speculative and the real reason maybe something else.