FrieslandCampina Strengthens its Position in Asia With $457 Million Acquisition
Royal FrieslandCampina has purchased a controlling interest in Alaska Milk Corporation, one of the largest dairy companies in the Philippines and listed on the Philippine Stock Exchange. FrieslandCampina is paying $302 million to increase its stake from about 8.1% to 68.9% by purchasing the shares held by the Uytengsu family, the founders and controlling shareholders of AMC.
In compliance with regulatory requirements, FrieslandCampina will launch a tender offer for the remaining outstanding publicly traded shares at an identical price, bringing the full value of the acquisition up to $457 million (Eur349 million). The acquisition adds a market of approximately 100 million consumers to FrieslandCampina’s existing consumer base.
With annual revenues of over Eur200 million, AMC has emerged as the leading player in the Philippine milk industry. For over thirty years it has displayed strong growth, consistent brand leadership in the canned liquid milk category and a strong and growing position in powdered milk. It has also recently expanded into higher value-added milk products, particularly in the ready-to-drink milk category. The company employs about a thousand people and has a production facility in San Pedro, Laguna.
This transaction will strengthen FrieslandCampina’s position inAsia, which is a strategic growth area for the dairy multinational. FrieslandCampina is already present in Thailand, Indonesia, Malaysia, China, Vietnam, India, Hong Kong and Singapore.
The acquisition will strengthen FrieslandCampina’s Consumer Products International business that also produces and sells dairy products in the Middle East and Africa, increasing its annual global revenues from Eur2.5 billion to nearly Eur2.7 billion. The deal furthers FrieslandCampina’s strategic route2020 goals.
Cees ‘t Hart, chief executive of Royal FrieslandCampina, comments: “Adding AMC gives us a strong, high-growth platform in the Philippines and access to a market of around 100 million customers. It also confirms our international ambition to enter markets where FrieslandCampina can create value. AMC’s management has already built up an outstanding position in the Philippine market. Together we can expand this position by introducing tried and tested FrieslandCampina concepts that have been successful in other parts of the world.”
FrieslandCampina will fund the transaction through short-term debt financing, preserving balance sheet flexibility. The transaction is expected to close around May 2012 and is subject to customary closing conditions, including receipt of certain regulatory approvals.
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