Trans-Tasman dairy set to take off
AUSTRALIA/NEW ZEALAND –, The New Zealand Dairy Board (NZDB) has finally approved an alliance with Australia’s largest dairy company, Bonlac Foods (see DII 65(5)7).
Under the proposal the NZDB will take a 25% stake in Bonlac, valued at A$825 million (506 million euro). It will also invest a further 160 million euro in the form of the transfer of businesses and 49 million euro in cash.
The NZDB’s decision brings negotiations that have so far dragged on for eight months nearer to a conclusion. The move still needs to be ratified by Bonlac’s 2,500 farmer shareholders next month, but for them the advantages of the deal are difficult to deny. Bonlac will emerge from the transaction, should it go ahead, with a sustainable debt level of under 184 million euro, while maintaining its annual turnover of more than 613 million euro. The NZDB valuation makes each 0.6 euro share in Bonlac worth 2.36 euro.
The two organisations plan to create an equally owned consumer business with a turnover of 337 million euro, and merge international marketing of dairy ingredients. Operating synergies captured by the trans-Tasman alliance will produce annual savings conservatively estimated at more than 18 million euro.
