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China Mengniu picking up Bellamy’s Australia
Posted on Monday, 16 September 2019 11:20
China Mengniu Dairy has signed on the dotted line to acquire Bellamy’s Australia, a Launceston-headquartered manufacturer of baby formula.
Under the terms of the transaction, the buyer has agreed to pay AUD 13.25 (USD 9.12) per item of stock in the company, thereby valuing the deal at AUD 1.50 billion.
The offer represents a 59.3 per cent premium over Bellamy’s close of AUD 8.32 on 13th September, the last trading day prior to the approach being announced.
Commenting on the transaction, Andrew Cohen, chief executive of the target, stated: “Mengniu is a preeminent dairy company in China and an ideal partner for our business.
“It offers a strong platform for distribution and success in China, and a foundation for growth in the organic dairy and food industry in Australia.”
Bellamy’s board has already given its unanimous seal of approval to the acquisition and recommended that shareholders vote in its favour.
Completion is slated to follow prior to the end of this year, with approval still required from the target’s investors, the Court and the Australian Foreign Investment Review Board.
Bellamy’s was established in Tasmania and produces, supplies and markets a range of organic food and formula for babies and toddlers.
The company’s products are available in Australia, Vietnam, Singapore, Malaysia, New Zealand and China.
It employs some 160 people across three countries and posted revenue of AUD 266.20 million in fiscal 2019, down from AUD 328.70 million over the preceding 12 months.
Gross profit for the two periods stood at AUD 115.90 million and AUD 128.90 million, respectively.
According to Zephyr, the M&A database published by Bureau van Dijk, there have been 22 deals targeting dry, condensed and evaporated dairy product manufacturers announced worldwide since the beginning of 2019.
Of these, the most valuable to date is worth MYR 1.00 billion (USD 240.04 million) and took the form of an acquisition as Wholesome Dairies agreed to pick up Malaysian creamer maker Can Ridge from Can-One back in June.
Other companies in the sector to have been targeted this year include Australia Deloraine Dairy Group, Bubs Australian and Ripple Foods.
© Zephus Ltd