China Mengniu Dairy Company Ltd will buy infant formula maker Bellamy’s Australia Ltd for A$1.43 billion ($982.98 million), the Australian company said on Monday after its board accepted the Chinese firm’s offer.
The A$12.65-per-share deal represents a 52% premium to Bellamy’s Friday closing price of A$8.32, excluding a special dividend of $0.60 per share paid by Bellamy’s prior to implementation of the scheme.
Bellamy’s board unanimously recommended that the shareholders vote in favour of the offer.
“It (Mengniu) offers a strong platform for distribution and success in China, and a foundation for growth in the organic dairy and food industry in Australia,” Bellamy’s Chief Executive Officer Andrew Cohen said in a statement.
Last month, Bellamy’s said its annual profit almost halved as sales dropped 19%, hampered by a Chinese crackdown on imports.
The company, once feted for its China exposure, has faced increasing challenges with new Chinese customs rules for e-commerce purchases crimping informal “daigou” exports and required clearances from health authorities delaying sales from a Bellamy’s plant in Australia.