Bright Dairy Buys Stake in New Zealand Milk Company

China's Bright Dairy & Food Co. announced on July 19 that it will pay 382 million yuan to buy a 51 percent stake in New Zealand milk processor Synlait Milk Ltd., the company's first-ever overseas acquisition.

Bright Dairy said it will pay NZ$ 3.15 per share for Synlait Milk, winning a 51 percent majority stake of the company. After the transaction, Bright Dairy will get four seats in Synlait Milk's seven-member board.

The deal is pending approval from the boards of the two companies and government agencies in China and New Zealand.

If successful, the deal will provide Bright Dairy with a high-quality material supply base overseas, according to the company. Bright Dairy is also counting on Synlait Milk to provide access to the high-end baby milk powder market.

Synlait Milk is expected to hit annual sales revenues of NZ$ 459 million in 2012, generating NZ$ 10.82 million in income for Bright Dairy.

Bright Dairy also disclosed that after the transaction, Synlait Milk will complete a public listing in three to five years.

Guo Benheng, president of Bright Dairy expects to complete the transaction in the fourth quarter of this year.