a2MC enters into exclusive DD on Mataura Valley Milk

NZX Code: ATM
ASX Code: A2M










21 August 2020
NZX/ASX Market Release
The a2 Milk Company enters into exclusive due diligence on Mataura Valley Milk
The a2 Milk Company (a2MC) is pleased to confirm that it is engaged in discussions with Mataura Valley
Milk (MVM), a New Zealand dairy nutrition business, to explore options for a2MC to participate in
manufacturing at MVM’s facility in Southland, New Zealand.
As a result of these discussions, a2MC advises that it made a non-binding indicative offer to acquire a
75.1% interest in MVM, for a total consideration of approximately NZ$270 million, based on an
enterprise value of circa NZ$385 million. MVM has now agreed to provide a2MC a period of exclusivity
to conduct confirmatory due diligence and negotiate definitive transaction documentation.
The exclusivity arrangements are supported by MVM’s current majority shareholder, China Animal
Husbandry Group (CAHG), which would retain a 24.9% interest in MVM alongside a2MC under the
terms proposed. CAHG is a wholly owned subsidiary of China National Agriculture Development Group,
which is also the parent company of a2MC’s strategic partner in China, CSFA Holdings Shanghai, Co.,
Ltd. (China State Farm).
Chief Executive Officer, Geoff Babidge said: “As previously announced, due to the increasing scale of
our infant nutrition business, we have been assessing participation in manufacturing capacity and
capability. The potential investment in Mataura Valley Milk’s recently commissioned facility, alongside
China Animal Husbandry Group, aligns with this strategic objective as we look to complement and build
upon our current strategic relationships with Synlait Milk and Fonterra Co-operative Group, which
remain in place. Our intention would be to invest further to establish blending and canning capacity at
Mataura’s facility to support the establishment of a fully integrated manufacturing plant for infant
nutrition.”
The discussions with MVM are ongoing and remain incomplete, with any potential transaction subject
to further due diligence, negotiation of definitive agreements, and requisite regulatory and third party
approvals. Any transaction that results from the current discussions is expected to be settled towards
the end of a2MC’s FY21 and would be funded entirely from existing cash reserves.
A further announcement will be made should the transaction progress to execution or as otherwise
required in accordance with the NZX and ASX Listing Rules.
Geoffrey Babidge
Chief Executive Officer
The a2 Milk Company Limited
Authorised by the Board of Directors

For further information, please contact:

Investors / Analysts
David Akers
Head of Investor Relations
T +61 2 9697 7013 l M +61 412 944 577
david.akers@a2milk.com

Media
Rick Willis
Media partner
M +61 411 839 344
rick@networkfour.com.au