FrieslandCampina acquires ‘supporting’ stake in Synlait Milk
The Netherlands-based dairy processor announced last week that its subsidiary, FrieslandCampina Investments Holdings, had agreed to purchase a 7.5% shareholding in the company, which manufacturers infant and adult nutrition products and milk powders.
Synlait Milk launched the IPO earlier this month in the hope of raising around NZ$120m (US$93m) to fund a series of “growth initiatives.”
Among its plans, Synlait Milk intends to invest in a new lactoferrin extraction and purification plant, an on-site blending and consumer packaging facility, a quality testing laboratory, and a new spray dryer.
FrieslandCampina says that through the share acquisition it is “supporting the company’s growth ambitions.”
“In recent years, we have developed a close working relationship with Synlait Milk, a supplier of high-quality raw materials. With this investment, we are supporting our supply of raw materials and also the growth of Synlait Milk,” said Roelof Joosten, chief operating officer of FrieslandCampina Ingredients.
Also commenting, Synlait Milk Chairman Graeme Milne branded FrieslandCampina’s investment “a positive endorsement of the growth opportunities we see for Synlait Milk in the coming years.”
Completion of the transaction is subject to the listing of Synlait Milk on the New Zealand Stock Exchange (NZX), which is expected to take place on 23 July 2013.
Once completed, FrieslandCampina will stand alongside Chinese dairy giant Bright Dairy Foods as a shareholder.
Prior to the IPO, Bright Dairy Foods held a 51% stake in Synlait Milk.
Once completed however, Bright Dairy Foods will hold control approximately 39.1% of the company.
Despite the dilution of its stake in Synlait Milk, the NZX granted Bright Dairy Foods a waiver from a listing rule that would have seen Bright Dairy Foods lose its control of the company’s board.
The waiver, which was granted on the condition that Bright Dairy Foods owns no less than 37% of shares, allows Bright Dairy to continue to appoint four of the eight Synlait Milk directors.
