The popular Australian baby food manufacturer is expected to be sold to a Chinese dairy giant for $ 1.5 billion
- China Mengniu Dairy Company has offered to purchase 100% of the shares of Bellamy
- The Bellamy board has unanimously recommended that shareholders approve the deal
- Mengniu offered $ 12.65 per share and Bellamy & # 39; s said it would pay a dividend
- Conditionally approved acquisition by Foreign Investment Review Board on Friday
China Mengniu Dairy Company has offered to purchase 100 percent of Bellamy's
Australian baby food company Bellamy & # 39; s is one step closer to the acquisition by a Chinese company.
China Mengniu Dairy Company has offered to purchase 100 percent of the shares of Bellamy in a deal of $ 1.5 billion.
The Bellamy board has unanimously recommended that shareholders approve the deal that would be made by the end of this year if they agree.
On Friday, the Foreign Investment Review Board conditionally approved the acquisition.
Treasurer Josh Frydenberg supported the approval, but insisted that certain conditions be imposed.
The company will have to have its headquarters in Australia for a decade and must be run by a majority management in Australia.
The treasurer also requires the Chinese buyer to invest at least $ 12 million in processing facilities for infant milk formulas in Victoria.
& # 39; Conditional approval shows that our foreign investment rules can facilitate such an acquisition and can assure the community that decisions are being made in a way that protects Australia's national interest & # 39 ;, said Frydenberg Friday.
Before the takeover bid, the share in Bellamy fell by 62 percent in 18 months.
There were allegations made by the Chinese state not to approve Bellamy's request to sell organic formulas in Chinese stores, which is still pending.
Mengniu is 16 percent owned by food processing company Cofco, which is co-owned by the Chinese state.
The management of the company based in Tasmania denied that the acquisition had anything to do with the rapid Chinese regulations to allow expansion into the country.
Andrew Cohen, CEO of Bellamy (right), described Mengniu as an & # 39; ideal partner & # 39;
Mengniu offered $ 12.65 per share and Bellamy & # 39; s said it would pay a dividend of 60 cents per share, meaning that shareholders will receive $ 13.25 per share.
That's a 59 percent premium on the $ 8.32 price before the takeover bid was announced in September.
Mengniu is a huge dairy company listed on the Hong Kong Stock Exchange with a market capitalization of $ 24.6 billion.
Andrew Cohen, CEO of Bellamy, described Mengniu as an & # 39; ideal partner & # 39 ;.
& # 39; It provides a strong platform for distribution and success in China and a basis for growth in the organic dairy and food industry in Australia & # 39 ;, says Cohen.
Jeffrey Minfang Lu, CEO of Mengniu, said that the acquisition of Bellamy & # 39; s would give him critical access to the Australian market.
& # 39; Bellamy & # 39; s is a leading Australian brand with a proud Tasmanian heritage and track record of delivering high-quality organic products to Australian mothers and fathers, & # 39; he said.
& # 39; This leading organic brand position and Bellamy's local activities and supply chain are crucial for Mengniu. & # 39;
Bellamy & # 39; s, founded in Tasmania in 2003, offers the only organic baby food made in Australia.
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