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Fonterra one step closer to partnership with Beingmate Baby & Child Food

February 13, 2015 • News

New Zealand Fonterra Co-Operative Group has announced that it has submitted a tender offer to acquire a stake of up to 20% in Chinese infant formula manufacturer Beingmate Baby & Child Food Company Ltd.

Image credit: fonterra.com

According to the company’s official statement, the offer was submitted to the Shenzhen Stock Exchange and the result of the tender offer is expected on 18 March, 2015.

The intention to form a global partnership in a bid to meet China’s growing demand for infant formula was announced in August 2014.

“The partnership will create a fully integrated global supply chain from the farm gate direct to China’s consumers, using Fonterra’s milk pools and manufacturing sites in New Zealand, Australia, and Europe. It is intended to increase the volume and value of Fonterra’s ingredients and branded products exported to China,” reads Fonterra’s statement.

The issuing of the partial tender offer is the first phase of the company’s plan to increase the volume and value of its ingredients and branded products exported to China.

The second phase will be the setting up of a joint venture to purchase Fonterra’s Darnum plant in Australia and the establishment of a distribution agreement to sell Fonterra’s Anmum™ brand in China.

This will be achieved once all regulatory approvals are granted and Fonterra successfully completes the partial tender offer.

Although analysts speculate that Fonterra’s partial tender offer was between $600 million and $700 million, no financial details were released.

Fonterra would use its manufacturing sites in New Zealand, Australia, and Europe to meet China’s growing demand for infant formula.

The company claims to be the largest processor of milk in the world, producing more than 2 million tonnes of dairy ingredients and related products every year.

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