French consumer goods group Danone saw its shares fall sharply on Monday, joining Nestlé in recalling multiple batches of infant formula products over concerns of potential contamination by a dangerous toxin.

The company, which owns brands like Evian water and Activia yogurt, announced late Friday that it was recalling a "very limited number of specific batches" of infant formula, following similar moves by other producers including Nestlé and French dairy giant Lactalis.

Danone's stock dropped 5.9% in early Monday trading, extending a decline of more than 10% from the previous week.

The group has initiated recalls in Singapore and Europe due to concerns that the products might be contaminated with toxins from Bacillus cereus, which can cause symptoms such as nausea and vomiting.

Investors are alarmed by both the recall itself and an investigation led by the French health ministry, which is probing the deaths of two infants who consumed potentially contaminated formula produced by Nestlé.

On Friday, Ireland's Food Safety Authority stated it had requested Danone to recall certain formula batches manufactured at its Irish facility, which supplies formula to multiple European countries.

"This is a very unfortunate development for the entire industry and for any company/brand facing potential health risks," said Jefferies analyst David Hayes, adding that the sales value of the recalled products is less than €40 million.

Danone said in a statement that routine testing and additional targeted analysis confirm its products are "safe and fully compliant with all applicable safety regulations."

The company also noted that it decided to withdraw a small number of batches after some local food safety agencies "updated their relevant guidance." Danone's shares now trade at €64 per share, a one-year low, down significantly from a peak of €80 per share last November.

Last Wednesday, Lactalis announced a recall of six batches of one of its infant formulas due to potential contamination in the arachidonic acid oil (ARA oil) used in the formulation.

In recent weeks, Nestlé has initiated a global recall of infant formula related to issues with the same ingredient. Jefferies analysts estimate the recall could cost Nestlé up to €1.6 billion, equivalent to 1.7% of the group's sales.

Nestlé has apologized for the recall and stated it does not expect a significant financial impact.

Bernstein analyst Callum Elliott pointed out that, unlike Nestlé's recall which involves more than 50 markets, Danone's recall is more targeted.

"We estimate the direct revenue impact of this recall will be less than €50 million," he said. However, Elliott added that if Danone's core brand Aptamil, which contributes 30% of the group's profit, becomes involved in the recall, it could lead to "brand reputation damage."