Through the strategic alliance, Engro Corporation will remain a significant shareholder and partner in Engro Foods.
The transaction, as approved by competition commission and other relevant authorities, is one of the single largest private sector Foreign Direct Investment (FDI) in Pakistan in recent years, amounting to a total investment of $450m.
FrieslandCampina and Engro Foods expect to take advantage of the conversion of the market from loose to packaged dairy consumption, which is expected to accelerate in the near future as a result of the growing middle income class, a desire for higher quality milk as well as increasing urbanization.
Engro Foods, which includes the brands Olper’s and Tarang, will continue to operate under its own name.
Following the completion of the acquisition, Hans Laarakker will be appointed CEO ad interim, replacing Babur Sultan, who has decided to leave the company.
Hussain Dawood, chairman of Engro Corporation, said the transaction would position Pakistan as an attractive investment destination for global companies and encourage others to follow.
“This partnership enables us to provide a wider array of affordable high quality dairy products for a healthier Pakistan, especially for its younger population,” Dawood said.
He added that improving the wellbeing of millions of farmers is a cause that the group has been focused on for the past five decades.
“Working with FrieslandCampina, a company owned by farmers, will help us to accelerate our work on improving productivity in the dairy sector.”