French food giant Groupe Danone SA will invest about 325 million euros ($417.17 million) in two joint projects with China Mengniu Dairy Co. Ltd., a move that will help improve Danone's sliding market share in China and restore consumer confidence in the country's dairy market.

Danone signed an agreement with China National Cereals, Oils and Foodstuffs Corp. (COFCO)­­—Mengniu's largest shareholder—to form a joint venture in which COFCO will own a 51-percent stake and Danone 49-percent.

Meanwhile, Danone—the world's largest yogurt maker—set up a joint venture with Mengniu to make and sell chilled yogurt products in China. Danone will own a 20-percent stake and Mengniu 80 percent.

Net sales are expected to reach about 500 million euros ($644 million), and the joint venture will run 13 factories across China with an estimated market share of about 21 percent.