Comprehensive M&A data with integrated detailed company information
Yashili to turn Yashili NZ into a joint venture
Posted on Tuesday, 12 June 2018 10:25
Yashili International Holdings is continuing to strengthen ties with Danone Asia by considering turning Yashili New Zealand (NZ) Dairy into a joint venture by selling a 49.0 per cent interest to the 25.0 per cent shareholder.
In a statement released after the stock exchange closed yesterday, the Cayman Islands-incorporated infant formula and nutrition food manufacturer cautioned the two had only entered into a memorandum of understanding.
Details regarding a sale and purchase of 49.0 per cent in the currently wholly-owned subsidiary would only be determined after arm’s length negotiations and the proposed joint venture is dependent on a definitive agreement.
A tie-up has certainly not come out of left-field, after all, Yashili NZ and Danone Asia’s subsidiary, Danone Asia Pacific Holdings, already have a supply agreement regarding the sale and purchase of base powder products and ingredients.
Furthermore, the New Zealand dairy-related food maker also has a service contract to co-pack and deliver canned infant formula to Danone Nutricia NZ.
Danone’s Danone Asia Baby Nutrition bought a 25.0 per cent stake in Yashili for HKD 4.39 billion (USD 1.44 billion at the time) in 2015 to become the second-largest shareholder, after China Mengniu Dairy with 51.0 per cent.
At the time, the share subscription agreement included technology and production improvements for the Hong Kong-listed, China-owned company.
Yashili, as an infant formula and nutrition food manufacturer with an international presence, has factories across Guangdong, Inner Mongolia and New Zealand, for example, producing items sold under brands like Dumex and Arla.
In the 12 months ended 31st December 2017, the group generated revenue of CNY 2.25 billion (USD 351.39 milion) (FY 2016: CNY 2.20 billion) and narrowed net loss to CNY 179.80 million from CNY 320.20 million year-on-year.
Yashili had gearing of 7.1 per cent and a debt to equity ratio of 35.3 per cent, as of 31st December 2017, compared with 14.3 per cent and 39.7 per cent, respectively, at the end of 2016.
© Zephus Ltd