China’s Ministry of Commerce has granted anti-trust and strategic foreign investment approval for its proposed partnership with Beingmate.
Fonterra announced the $NZ615 million deal with Beingmate, China’s leading infant formula manufacturer, in August.
Following further regulatory approvals, Fonterra plans to proceed to the next stage of the deal, which is a Partial Tender Offer to gain up to 20 percent of Beingmate.
Fonterra will then establish an Australian joint venture which will buy the Darnum plant in west Gippsland.
The Darnum factory is currently owned by Fonterra and has a 50,000 tonne a year capacity. Beingmate will own 51 per cent of the joint venture, but Fonterra will operate the factory.
The deal will also include an exclusive distribution agreement for Fonterra’s Anmum infant formula product in China, which will make the Fonterra brand more widely available. Fonterra chief executive Theo Spierings said the Anmum business would be worth $NZ100 million by 2018. Anmum is produced in New Zealand.
Beingmate operates six modernised plants and logistics centres, 80,000 retail terminals, 30 branches across China and more than 1000 authorised stores.
Fonterra will provide further updates as the partnership progresses.