Mengniu Launches Takeover Bid for Baby Formula Manufacturer Bellamy
Posted Thursday, September 19, 2019 at 1:10pm
| On September 15, the Board of Directors of Australia’s baby formula manufacturer, Bellamy (Australia’s only certified organic infant formula manufacturer), accepted a $1.5 billion takeover bid by Mengniu Dairy Company. Bellamy was once seen as a role model for companies seeking to develop a presence in China, but reportedly saw annual profits drop 19% (due to a fall in sales) after tighter rules by Chinese customs authorities curbed imports that were taking place through informal channels. It is noteworthy that this took place in the lead-up to the takeover attempt, despite company executives making positive comments regarding the bid. Despite being accepted by the board, the deal still needs to be accepted by shareholders and cleared by Australia’s Foreign Investment Review Board. Mengniu was among the companies implicated in the 2008 dairy crisis in China, where infant formula was found to have been adulterated with melamine to increase apparent protein content. Mengniu competitor Yili acquired New Zealand’s Westland Dairy for $370 million in July 2019. |