A2 milk taking controlling stake in Mataura Valley Milk

A2 Milk’s NZ$270 million bid for New Zealand-based Mataura Valley Milk has been given the green light by the country’s Overseas Investment Office.

The decision clears the way for a2 to pick up a 75 percent interest in the dairy nutrition business, which is now set to occur at the end of July.

According to the business, the acquisition “provides the opportunity to participate in nutritional products manufacturing, provides supplier and geographic diversification, and strengthens our relationship with key partners in China.”

“As previously announced, due to the increasing scale of our infant nutrition business, we have been assessing participation in manufacturing capacity and capability,” said A2 Milk Company CEO Geoff Babidge said last year.

“Our intention would be to invest further to establish blending and canning capacity at Mataura’s facility to support the establishment of a fully integrated manufacturing plant for infant nutrition.”

A key part of the investment is that Mataura Valley Milk’s current majority shareholder, China Animal Husbandry Group, will retain its 25 percent interest in the business alongside a2’s 75 percent interest.

China Animal Husbandry Group is the parent company to a2’s strategic logistics and distribution partner in China, CSFA Holdings Shanghai, allowing closer cooperation between the two firms.