A China-based dairy firm has expressed its intention to acquire a majority stake with management control in Fauji Foods Limited (FFL), known for its Nurpur brand, according to a notice sent on Tuesday to the Pakistan Stock Exchange (PSX).
The potential acquirer, Inner Mongolia Yili Industrial Group Company Limited, will hold talks to acquire 51% voting share in FFL from its parent firm, Fauji Fertilizer Bin Qasim Limited (FFBL), and other shareholders.
The announcement was taken as a positive by investors as FFL’s share price gained by the maximum limit of 5%, increasing Rs1.72 to Rs36.12 with 345,000 shares changing hands on a day the KSE-100 Index witnessed profit-taking and plunged 1.94%. FFBL’s share price also hit the upper price limit, closing at Rs39.55 with a volume of 259,000 shares.
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“We have received a notice of public announcement of intention from a potential acquirer, Inner Mongolia Yili Industrial Group Company Limited, whereby the potential acquirer has expressed its intention to enter into negotiations or discussions with Fauji Fertilizer Bin Qasim Limited (FFBL) for the proposed acquisition of upto 51% of the voting shares and/or control in Fauji Foods Limited, from FFBL and other shareholders,” FFL company secretary Brig, Zahid Nawaz Mann was quoted as saying in the PSX notice.
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Inner Mongolia Yili Industrial Group Co. Ltd. is a China-based company, principally engaged in the processing, production and distribution of dairy products and mixed feedstuffs, according to Reuters. Subject to execution and approval of the deal by regulators, this would be the second transaction involving foreign direct investment (FDI) in the current month.
Around a week ago, Dutch company, Vopak LNG Holding B.V., executed an agreement with Engro Corporation to acquire 29% stake in Elengy Terminal Pakistan Limited (ETPL) at a price of $38 million.
The country received a total of $2.76 billion in FDI in the previous fiscal year 2018.
The transaction, subject to approval, will also be the second major acquisition in Pakistan’s formal food sector by a foreign firm. Earlier, another Dutch firm, FrieslandCampina Pakistan B.V. (FC Pakistan), acquired 51% stake in Engro Foods at a price of $446.81 million in December 2016.
By Salman Siddiqui
Source: The Express Tribune
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