South Africa’s Aspen Holdings is conducting a strategic review of its infant-formula business to “enhance the value” of its nutritional division following an approach by a potential suitor last year.

Johannesburg-listed Aspen’s nutritional division includes the Alula infant-formula brand and generated revenues of ZAR3.2bn (US$266.4m) in fiscal 2017. The unit is primarily focused on emerging markets and has “established businesses and leading brands” in the Asia Pacific, Sub-Saharan Africa and Latin America, and a growing presence in the Middle East and China.  

“Aspen has decided to formalise its review of strategic options for Nutritionals” and is considering a number of options including “the introduction of a strategic partner that could unlock appropriate value”, the company said in a statement today (29 January). 

Aspen said it received an “unsolicited approach” for the nutrition business in the third quarter of last year. The division has three infant-formula manufacturing sites in New Zealand, South Africa and Mexico.

Its Alula brand was recently approved by the China Food and Drug Administration (CFDA), according to the statement. 

China has introduced a change in regulations for infant formula to improve product safety and quality, whereby all companies are required to apply for registration of their brands.

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The company said: “The CFDA’s approval of the registration of Alula enables Aspen to continue with the export of its infant milk products to China under the more rigorous registration requirements recently imposed by the CFDA and is
an important milestone for Aspen as it seeks to establish and grow its brand presence in China, the world’s biggest consumer of infant-milk formula.”

Centerview Partners UK as been appointed as financial advisor to assist in the strategic review process. 

Aspen has a market capitalisation of US$10bn and says it is the largest pharmaceutical company listed on the Johannesburg Stock Exchange.