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A2 Milk (ASX:A2M) share price on watch after acquisition update
This infant formula company is close to completing an acquisition…
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A2 Milk sees Mataura Valley returning a profit in 2025
24 Dec, 2020 02:26 AM
3 minutes to read
NZX-listed A2 Milk expects its soon-to-be-acquired Southland milk processor Mataura Valley Milk to be earnings positive by 2025.
Mataura Valley, currently owned by China Animal Husbandry Group (CAHG), made a $47 million loss in 2019.
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A2 Milk, which bases its product offer on dairy that is free of the a1 beta protein, first announced plans to buy a 75 per cent of Mataura Valley in August.
In a statement today, a2 Milk confirmed that it had entered into binding agreements to buy a 75 per cent interest in Mataura Valley for $268.5m.
Mataura Valley s current majority shareholder is a Chinese state-owned enterprise, China Animal Husbandry Group (CAHG), which will retain a 25 per cent interest. The group is a subsidiary of China National Agriculture Development Group, which is the parent of a2’s strategic logistics and distribution partner in China, CSFA Holdings Shanghai (China State Farm).
John Hawkins/Stuff
Mataura Valley Milk opened its $226m plant near Gore in 2018. Babidge said it was pleasing the transaction had the support of all Mataura’s existing minority shareholders, ‘’many of whom are farmer suppliers.” The purchase will give it dual supply arrangements for nutritional products, complementing its existing supply relationships with Synlait Milk and Fonterra, he said.