US dairy giant Deans Foods circles a2 Milk

US-listed Dean Foods has been unveiled as the mystery bidder for a2 Milk, continuing North America's interest in trans-Tasman dairy companies.
Share on twitter
Share on facebook
Share on linkedin
Share on whatsapp
Share on email

Dean Foods – one of the United States’ biggest processors and direct-to-store distributors of fluid milk – is understood to have partnered with ASX-listed Freedom Foods to explore a possible acquisition, according to The Australian Financial Review‘s Street Talk column.
Freedom Foods and a2 declined to comment on Dean Foods’ interest, which comes after Canadian milk processor Saputo won a three-way global bidding war for Warrnambool Cheese & Butter in early 2014.
The fight for WCB made it the world’s most expensive dairy company on a price-earnings basis and reignited interested in Australia’s dairy industry, which had been stagnant for much of the past decade.
Deans, which has a market capitalisation of $US1.6 billion ($2.07 billion), could help accelerate a2’s expansion in the US, which began in mid-April when the company began exporting fresh milk to California. It came after a2 started flying fresh milk from Australia to China in 2014.
Craigs Investment Partners analyst Adrian Allbon estimated a2 – with a $400 million market capitalisation – would need to raise $NZ50 million ($44.35 million) to «execute its China and US growth opportunities».
Freedom has confirmed an «unnamed leading international liquid dairy milk company» is interested in buying a2, subject to due diligence and the milk processor halting its «advanced capital raising plans».
Freedom, which is controlled by the billionaire Perich family, is a2’s biggest shareholder, owning 17.9 per cent. The Perichs own another 1.3 per cent of the company.
«This process is ongoing and there is no certainty that an offer will be forthcoming,» the company said.
«Freedom Foods will keep the market informed of any material developments in compliance with its continuous disclosure obligations.»
The A2 board is evaluating Freedom’s proposal, particularly about abandoning its capital raising plans.
«The last condition is particularly relevant as the company has recently been contemplating, and was in advanced stages of planning for, an equity raising,» a2 said.
A2 chief executive Geoff Babidge has declined to comment.
A2 says its product may be easier to digest than regular cows milk, which contains both the A1 and A2 beta casein proteins. A2 exclusively contains the a2 protein.
As well as fresh milk, it produces infant formula, which it also exports to China.
A2’s infant formula products are marketed in China through internet retailer JD.com, which plans to launch in Australia next week.
It was speculated that a2 was attracting Asian as well as North American suitors, given it was a known product in both markets.
 
Source: SMH
 

Mirá También

Así lo expresó Domingo Possetto, secretario de la seccional Rafaela, quien además, afirmó que a los productores «habitualmente los ignoran los gobiernos». Además, reconoció la labor de los empresarios de las firmas locales y aseguró que están «esperanzados» con la negociación entre SanCor y Adecoagro.

Te puede interesar

Notas
Relacionadas