New Zealand-based Fonterra, the world's largest dairy exporter, announced today it has completed its partial tender offer and will acquire 192.4m shares in Beingmate Baby and Child Food Company.
At RMB 18.00 (US$2.87, NZ$3.90, €2.72) per share, the 18.8% stake in Beingmate will set Fonterra back RMB 3.464bn (US$553m, NZ$750m, €523m).
Fonterra expects to complete the transaction in "the next few days."
The share purchase enables Fonterra and Beingmate to move on to the "next phase" of their global partnership.
In August 2014, Beingmate and Fonterra agreed to form a global partnership to meet growing demand from China for infant formula.
Joint venture
Fonterra submitted its offer to acquire up to 20% of Beingmate to the Shenzhen Stock Exchange in February 2015 after the global partnership was granted foreign investment approval by the Chinese Ministry of Commerce.
"Our goal was to acquire up to 20%," said Lukas Paravicini, chief financial officer, Fonterra.
"We are extremely satisfied and confident that the partnership can and should proceed on the basis of the 18.8% stake. It is a good result."
Fonterra and Beingmate can now move forward with their plan to establish an infant formula joint venture in Australia.
The proposed joint venture - controlled by Beingmate with a 51% stake - will purchase a Fonterra plant in Darnum Australia.
"Over the next few weeks, Fonterra and Beingmate will now move ahead with the next phase of our partnership, which includes establishing a joint venture to purchase the Darnum plant in Australia and finalising a distribution agreement making Beingmate Fonterra's exclusive Anmum distributor in mainland China," Paravicini added.