Australian dairy company a2 Milk (a2MC) disclosed that it has offered to acquire a stake of 75.1% in Mataura Valley Milk (MVM), a New Zealand dairy nutrition company, from China Animal Husbandry Group, for about NZ$270 million ($176.86 million).

The proposed deal is aimed at a2 Milk getting access to the manufacturing facility of Mataura Valley Milk in Southland, New Zealand.

The parties are currently engaged in discussions regarding the potential deal, which values the New Zealand dairy nutrition company at NZ$385 million ($252.2 million).

Mataura Valley Milk has agreed to offer a period of exclusivity to a2 Milk for carrying out confirmatory due diligence and negotiate documentation for a definitive transaction.

China Animal Husbandry Group (CAHG), which is expected to retain a 24.9% stake in the New Zealand dairy company, is fully owned by China National Agriculture Development Group, which is also the parent company of CSFA Holdings Shanghai (China State Farm), which happens to be the strategic partner of a2 Milk in China.

Geoff Babidge – CEO of a2 Milk said: “As previously announced, due to the increasing scale of our infant nutrition business, we have been assessing participation in manufacturing capacity and capability. The potential investment in Mataura Valley Milk’s recently commissioned facility, alongside China Animal Husbandry Group, aligns with this strategic objective as we look to complement and build upon our current strategic relationships with Synlait Milk and Fonterra Co-operative Group, which remain in place.

“Our intention would be to invest further to establish blending and canning capacity at Mataura’s facility to support the establishment of a fully integrated manufacturing plant for infant nutrition.”

  a2 Milk, Australia, China Animal Husbandry Group, Dairy industry news, Food acquisition news, Geoff Babidge, Mataura Valley Milk, New Zealand