Bellamy’s has not been able to sell its products in China due to lack of license, which has hurt its ambition and sales, given that China is the largest infant formula market in the world.
The acquisition deal would require the approval of Bellamys shareholders, the Foreign Investment Review Board (FIRB) and the NSW Supreme Court to go through.
Bellamy’s Organic, organic infant and baby food manufacturing company based in Australia, is set to be acquired by China Mengniu Dairy Company, a company involved with the production and distribution of ice cream and dairy products across China, in a $1.5 billion agreement.
Andrew Cohen, the Chief Executive Officer of the Bellamys Organic, stated that the $1.5 billion proposal from the Chinese giant in dairy products won’t change the likelihood of the company receiving an important regulatory approval required for sale of infant product across retail stores of China.
Bellamys Organic is still awaiting the Chinese government’s approval to sell Bellamys organic infant formula in China. However, it has been more than 20 months and the license has not been approved yet by State Administration for Market Regulation (SAMR) of China.
As Bellamy’s has not been able to sell its products in China due to lack of license, it has hurt its ambition and sales, given that China is the largest infant formula market in the world. This was the key reason why Bellamy’s recently scrapped its aim of hitting annual revenue of $500 million by 2021-2022.
The proposed acquisition deal would require the approval of Bellamys shareholders, the Foreign Investment Review Board (FIRB) of Australia and the NSW Supreme Court to go through. China Mengniu Dairy Company, listed in Hong Kong, has a market capitalization of approximately $25 billion.
The news of the agreement exponentially boosted Bellamys shares, which jumped up by almost 54.9 percent to $12.89.
ASX-listed Bellamys shareholders would receive $13.25 per share as per the proposed deal, representing a 59 percent premium to the $8.32 closing price last week.
Source credit: https://www.smh.com.au/business/companies/bellamy-s-australia-set-to-be-taken-over-by-chinese-company-in-1-5b-deal-20190916-p52rnb.html
Saipriya Iyer presently works as a content developer for decresearch.com and a couple of similar portals. Having dabbled with the domain of content creation for nearly half a decade, she now boasts of an enviable portfolio, holding substantial experience in penning down pieces related to technology, finance, and a wide spectrum of other industry verticals. A qualified computer engineering graduate from the University of Pune, Saipriya can often be found leveraging her knowledge of software technology and electronics in her write-ups. She can be contacted at- [email protected] | https://twitter.com/saipriya_i/