Sector News

Freedom Foods and US partner Dean Foods scrap a2 Milk takeover bid

September 2, 2015
Food & Drink

US dairy giant Dean Foods has abandoned a potential takeover of trans-Tasman dairy company a2 Milk.

Dean lobbed an expression of interest into a2 with Australian breakfast cereal and snack company Freedom Foods in June. Freedom confirmed on Monday that the pair had ditched takeover plans.

“The company and Dean Foods have ceased detailed discussions in relation to a2,” Freedom said.

Fairfax Media revealed earlier in August that insider trading investigation into Dean by the US regulator had derailed the takeover plans. The investigation reportedly involved golfer Phil Mickelson and professional sports gambler William T. Walters.

Dean has also refused to explain the resignation of its chairman Tom C. Davis, who left soon after the company revealed it was being investigated.

A2 Milk’s board rejected the offer from Dean and Freedom, which is controlled by the billionaire Perich family and is a2’s biggest shareholder, saying it was not compelling enough.

The three parties had not spoken in the month since, and Freedom was believed to be underwhelmed by a2’s full-year financial results, despite it reporting a 40 per cent surge in revenue and being broadly in line with analysts’ estimates.

Freedom posted on Monday a 366.8 per cent jump in net profit to $56.6 million for the year ending June 30.

Chief executive Rory Macleod said this included “an unrealised post-tax fair-value gain of $51.96 million” after the company signalled earlier that it wanted to sell its 19 per cent stake in a2 Milk.

On an underlying basis, Freedom’s net profit fell 60.3 per cent to $4.9 million. Revenue, meanwhile, firmed 4.1 per cent to $91.5 million.

Mr Macleod said Freedom had merely reclassified its a2 stake for accounting reasons, after it lost one of its two board seats following the resignation of Perry Gunner at the milk processor’s annual meeting in November 2014. He said it did not mean Freedom would literally sell its holding.

“The strategic investment in the a2 Milk Company provides the company [Freedom Foods] and its shareholders a potentially significant value-creation opportunity,” he said.

“We will continue to review all our options with regard to the a2 investment, including evaluating the benefits of maintaining a strategic stake in a2.”

Source: Sydney Morning Herald

comments closed

Related News

January 29, 2023

Danone appoints three new deputy CEOs

Food & Drink

Danone has appointed three deputy CEOs to “better connect categories and regions” and drive the delivery of its ‘Renew Danone’ strategy. The new appointees are Veronique Penchienati-Bosetta, Shane Grant and Juergen Esser. They will report to Danone CEO Antoine de Saint-Affrique.

January 29, 2023

PepsiCo Portugal invests €7.5m in biodigester

Food & Drink

PepsiCo Portugal has announced that it will invest €7.5 million to construct a new biodigester, which will turn organic waste into biogas. As well as helping its Carregado facility to achieve a 30% reduction in carbon emissions, the biodigester will also contribute to reducing gas consumption, allowing the installation to use the biogas produced during the anaerobic digestion process.

January 29, 2023

Kerry’s fellowship with Upcycled Food Foundation explores future of food waste prevention

Food & Drink

Kerry is sponsoring The Kerry Upcycled Food Foundation Fellowship in a new partnership with the Upcycled Food Foundation (UFF), the non-profit subsidiary of the Upcycled Food Association (UFA). The research fellowship is the second initiated by the UFF and will work toward advancing the understanding of the market, consumer perception and technical opportunities of upcycled food.

How can we help you?

We're easy to reach