PARIS—Danone said on Sunday it was taking a first step towards selling off its stake in its Chinese dairy partner as the French food group faces pressure from shareholders to improve its performance and governance. Danone said in a statement that following a review of its portfolio it had reached an agreement to convert its indirect stake in China Mengniu Dairy Company Limited into a 9.8 percent direct holding in the Hong Kong-listed group. A sale of the direct stake could follow this year in one or in several transactions and depending on market conditions, Danone said, adding that most of the gains would be used to buy back its own shares. The French group said the indirect stake currently had a book value of about 850 million euros ($1.03 billion) and contributed 57 million euros to its income in 2019. “Today’s announcement is an example of our commitment to …