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a2 Milk Company buys shares in Synlait

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By Jim Cornall+

06-Mar-2017

The a2 Milk Company already has a relationship with Synlait, now it's strengthening the ties by buying shares.
The a2 Milk Company already has a relationship with Synlait, now it's strengthening the ties by buying shares.

Australia’s a2 Milk Company (a2MC) has announced it will acquire approximately 8.2% of the shares of Synlait Milk Limited.

a2MC says the deal further strengthens the current business relationship between the two parties.

It says it will acquire, through a subsidiary, the shares from FrieslandCampina at a price of NZ$3.275 (US$2.30) per share for total consideration of NZ$47.9m (US$33.6m).

The acquisition follows a2MC’s reaffirmation of its infant formula supply agreement with Synlait in August 2016.

The supply agreement strengthened the business relationship between a2MC and Synlait by providing certainty around medium term growth plans, the company stated.

a2MC managing director, Geoffrey Babidge, said the investment demonstrates a2MC’s commitment to supporting its major contractor, and sees this as a long term holding.

In acquiring this stake in Synlait, a2MC said it has no plans to increase its shareholding beyond the present level, and believes its shareholding will provide stability to Synlait’s capital structure as it grows.

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