Friday, March 29, 2024

First two ticks for Fonterra deal

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Fonterra has gained some Chinese approval to take a 20% stake in baby and child food maker Beingmate.  
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It has been granted antitrust and foreign investment approval by the Chinese Ministry of Commerce for the $615 million deal but still needed more regulatory approvals.

Once those hurdles were crossed, Fonterra would offer 18 yuan a share for Beingmate stock in a partial tender, that would be supported by chairman Wang Zhentai, whose stake will be diluted to 33%.

As part of the deal Fonterra will sell its Darnum plant in Victoria, Australia, to a joint venture with Beingmate, of which the New Zealand firm will hold 49% and the Chinese company 51%.
Under the partnership, Fonterra will licence the Anmum brand exclusively to Beingmate in China, where it has access to 80,000 outlets and receive royalties.

Its benefits include its share of dividends paid by Beingmate, which have been 50-60% of profits, and selling raw milk to the Darnum plant, which Fonterra will continue to operate.
Units in the Fonterra Shareholders' Fund were unchanged at $6. – BusinessDesk

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