2 March 2017
ASX/NZX Market Release
a2MC''s commitment to supply
The a2 Milk Company ("a2MC" or the "Company") is pleased to announce it will
acquire a shareholding in Synlait Milk Limited ("Synlait"), further
strengthening the current business relationship between the two parties.
a2MC will acquire, through a subsidiary, ~8.2% of the fully paid ordinary
shares in Synlait from FrieslandCampina at a price of NZ$3.275 per share for
total consideration of ~NZ$47.9m. This represents a ~3% premium to the NZX
one month volume weighted average price of NZ$3.18. FrieslandCampina had
effectively signalled a change of strategic intent for its shareholding by
not participating in the capital raising completed by Synlait in October
2016.
The acquisition of shares follows a2MC''s reaffirmation of its infant formula
supply agreement with Synlait in August 2016. The supply agreement
strengthened the business relationship between a2MC and Synlait by providing
certainty around medium term growth plans. This supply agreement will
continue to be the cornerstone of the commercial relationship between the two
parties.
Commenting on the decision to purchase a shareholding in Synlait, a2MC
Managing Director Geoffrey Babidge said "The investment in Synlait builds
upon our existing commercial ties with an innovative dairy processing
company. As Synlait''s preferred customer, this investment demonstrates a2MC''s
commitment to supporting our major contractor and we see this as a long term
holding."
In acquiring this stake in Synlait, a2MC has no plans to increase its
shareholding beyond the present level. a2MC believes its shareholding will
provide stability to Synlait''s capital structure as it grows.
About Synlait
Synlait (NZX Code: SML; ASX Code: SM1) is an innovative dairy processing
company based in the heart of Canterbury, New Zealand. Listed on both the New
Zealand and Australian stock exchanges, Synlait combines expert farming, with
state-of-the-art processing, to produce a range of nutritional milk products
that provide genuine benefits for health and wellbeing. Synlait has three
leading-edge milk powder dryers, including a purpose-built infant formula
facility, the largest and most sophisticated in the Southern Hemisphere.
For further information contact:
The a2 Milk Company Limited
Geoffrey Babidge
Managing Director and CEO
+61 2 9697 7000
End CA:00297747 For:ATM Type:GENERAL Time:2017-03-03 08:30:14