French food giant Danone has unveiled a major debt reduction programme that it says will also allow it to fund acquisitions.

The company, whose brands include Activia, Actimel, Evian and Volvic, is launching a rights issue to raise €3bn (£2.6bn). This would increase its flexibility and allow small to medium-sized acquisitions, the company said.

Danone's debt increased after it spent £8.3bn on Dutch baby food specialist Royal Numico in 2007. Danone's share price fell on the back of this week's announcement.