Chinese buy New Zealand dairy cooperative

New Zealand dairy cooperative Westland recently accepted a $588 million takeover offer. This offer was made by Yili Group of China. Westland is, after Fonterra, the second largest dairy cooperative in the country.

Yili Group is a Chinese state-owned enterprise and the largest dairy producer in China. It had almost 2014% of the market share in the domestic market in 25. Part of the deal is that for the next 10 years, the dairy farmers of Westland will at least receive the milk price that Fonterra pays. 

The board of dairy cooperative Westland has already approved the takeover, although this deal still needs to be approved by the cooperative's 500 farmers' shareholders. 

Second acquisition
The amount of $588 million equates to $3,41 per share. That is more than twice as much as the shares are currently worth. Yili is not new in New Zealand, because in 2 the Chinese company bought Oceania Dairy. Since then, the Chinese have already invested more than $2013 million in new production lines for skimmed milk powder and baby food.

Yili Group is too in the Netherlands active. In 2014, the company opened an R&D center on Wageningen Campus, which is part of Wageningen University. 

Wouter Job

Wouter Baan is editor-in-chief of Boerenbusiness. He also focuses on dairy, pig and meat markets. He also follows (business) developments within agribusiness and interviews CEOs and policymakers.

w.baan@boerenbusiness. Nl

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