Fonterra to reduce Beingmate shareholding
Image: Fonterra
Fonterra is looking to sell a portion of its stake in Beingmate Baby & Child Food Company, which is currently a shareholding of 18.8%.
Chief executive Miles Hurrell said the decision is part of Fonterra’s three-point plan to turn around the business: “One aspect of this plan was to take stock of our business. As part of this, we have re-evaluated every investment, major asset and partnership to ensure they still meet the co-operative’s needs today.
“This started with a strategic review of our relationship with Beingmate, which has been disappointing.
“The first action in this review was bringing the distribution of Anmum in China back in-house under our management.
“We then ended the Darnum joint venture with Beingmate, bought back Beingmate’s share of our Darnum facility in Australia, and entered into a multi-year agreement for Beingmate to purchase ingredients from us.”
“What remains is our shareholding in Beingmate Baby & Child Food, which we now view as a financial investment only.
“We have talked to a number of parties regarding the potential sale of our entire stake in Beingmate, but so far have been unsuccessful in finding a buyer.
“As a result of this, we are now considering selling part of our holding.”
Subject to demand for the shares, under the Shenzhen Stock Exchange market rules it is only possible to sell up to 1% every 90 days directly on the exchange, or sell up to 2% in a single block every 90 days. Trades greater than 5% can be made to an individual party in an off-market transaction.
“From here, it’s about making pragmatic decisions to get the best outcome for the co-op from our holding in Beingmate,” said Hurrell.
“China will always be one of our most important markets. We’ve got a strong business there and are still very much focused on the areas in China where we can succeed.”
