KARACHI – Inner Mongolia Yili Industrial Group, one of China’s largest dairy businesses, has withdrawn its intention to acquire majority stake in Fauji Foods Limited, according to a notice sent by the company to the Pakistan Stock Exchange (PSX).
Fauji Foods notified markets of Yili’s exit from the deal, which would have seen the latter take a 51% holding in the company, in a filing to the PSE yesterday.
“We write to disclose that through its letter dated April 29, 2019, Citibank, as the manager to the offer for Inner Mongolia Yili Industrial Group (‘Acquirer’), has informed us that the acquirer is withdrawing its intention to acquire up to 51% shares and/or control of Fauji Foods,” read the notification.
The two sides were unable to reach an agreement over the sale and the transfer of shares and “as the time period to make the offer has lapsed”, Yili has withdrawn, according to the filing.
https://en.dailypakistan.com.pk/headline/chinas-dairy-group-likely-to-buy-51-stake-in-pakistans-fauji-foods/
Yili first disclosed its interest in acquiring the firm, which is a subsidiary of Fauji Fertilizer Bin Qasim Ltd., to the Shanghai Stock Exchange in July.
“The potential acquirer has expressed its intention to enter into negotiations or discussions with Fauji Fertiliser Bin Qasim Limited (FFBL) for the proposed acquisition of up to 51% of the voting shares and/or control in Fauji Foods Limited, from FFBL and other shareholders,” according to the previous notice.
Fauji Foods markets a range of dairy and juice products under the brand name Nurpur.
Back in March, Fauji Foods said the country’s Securities and Exchange Commission had granted Yili a 90-day extension until 29 April to put in a public offer for the Lahore-based business. No financial terms have ever been disclosed.
Formerly Noon Pakistan Ltd., Fauji Foods’ origins date back to 1966. It owns a plant based in Bhalwal in the Sargodha district producing butter, cheese, UHT milk, pasteurised milk, tea whitener, flavoured milk, cream, ghee, honey and jam.
Inner Mongolia Yili Industrial Group produces and sells dairy products in China and internationally. In 2017, Yili achieved sales of 68.06 billion yuan, expanding 12.29 percent year-on-year. Its net profit reached 6 billion yuan, jumping 17.7 percent over the previous year. In 2017, it accounted for 20.5 percent of the market share, according to its earnings report.
Yili said earlier that it aims to become one of the top five global dairy producers in the near future, reaching an annual sales revenue of more than 100 billion yuan.
