A formal takeover offer for infant-formula maker Bellamy’s Australia by a Chinese dairy group has been approved by the country’s overseas investment regulator.
In a filing with the Australian Securities Exchange, the Canberra-based Foreign Investment Review Board (FIRB) said it had given “written notice” to China Mengniu Dairy Company approving the deal, adding it has “no objections to the proposed acquisition”.
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However, the FIRB noted hurdles to final clearance remain, including the approval of Sydney-listed Bellamy’s shareholders – slated to be discussed at a meeting on 5 December – court approval, and the “satisfaction or waiver of certain other customary conditions” under a so-called Scheme of Arrangement.
The board has already recommended the owners of the Launceston, Tasmania-based company accept the offer.
China Mengniu’s offer amounts to AUD1.5bn (US$1.02bn today) based on AUD13.25 per share, including a statutory special dividend payment of 60 Australian cents.
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Market watchers had anticipated the deal would be met with political opposition given strained relations between Australia and China, particularly when China Mengniu is effectively state owned given that government-backed COFCO Corp. is its majority shareholder.
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By GlobalDataMeanwhile, local media reports said Tasmanian senator Jacqui Lambie has called for more disclosure about the deal amid her concerns of
a “Communist Chinese takeover” of Australian companies.
But treasurer Josh Frydenberg said despite the deal’s approval by the FIRB he has imposed a number of conditions: Bellamy’s keeps its headquarters in Australia; the majority of its board be Australian resident citizens; and at least AUD12bn should be funnelled into improving or establishing infant-formula facilities in the state of Victoria.
