New Zealand’s Fonterra Co-operative Group Ltd, the world’s largest dairy products exporter, has completed a partial tender offer to buy an 18.8 percent stake (worth US$551.95 million) in Chinese infant formula manufacturer Beingmate Baby and Child Food Co. Ltd.
The amount is slightly less than the 20 percent stake the company had been planned to purchase. “Our goal was to acquire up to 20 per cent. We are extremely satisfied and confident that the partnership can and should proceed on the basis of the 18.8 per cent stake. It is a good result”, commented Fonterra’s Chief Financial Officer Lukas Paravicini.
China is the biggest market for Fonterra, importing 25% of New Zealand’s total dairy export production. The deal will see the formation of a joint venture to distribute Fonterra’s infant formula brand Anmum in China and also builds a fully integrated global supply chain using Fonterra’s milk pools and manufacturing sites in New Zealand, Australia, and Europe which allows for products to be brought from the farm gate directly to Chinese consumers.
Mr Paravicini added: “Over the next few weeks, Fonterra and Beingmate will now move ahead with the next phase of our partnership, which includes establishing a joint venture to purchase the Darnum plant in Australia and finalising a distribution agreement making Beingmate Fonterra’s exclusive Anmum™ distributor in mainland China”.
Source: Fonterra / Global Ag Investing