New Zealand’s a2 Milk Co Ltd announced it has agreed to buy a 75.1% stake in dairy products maker Mataura Valley Milk from China Animal Husbandry Group in a ($252 million) deal.
The offer follows talks regarding a2’s potential investment in Mataura’s Southland manufacturing facility, to support the increasing scale of the dairy producer’s infant nutrition business.
A2 Milk said it has been granted exclusive rights to conduct due diligence for the potential deal, which would be funded with cash and settled near the end of fiscal 2021.
China Animal Husbandry will retain a 24.9% interest in Mataura Valley Milk, a New Zealand-based milk and nutritional powders maker.
The potential investment in the manufacturing facility aligns with a2’s objective to complement current strategic relationships with Synlait Milk and Fonterra a2 Chief Executive Officer Geoffrey Babidge said in a statement.