Japfa completes 25% stake sale in AustAsia to Meiji for $354.28m

It will continue to own 75% stake in AustAsia.

Japfa has closed the sale of 25% share capital in AustAsia Investment Holdings to Meiji for a total cash consideration of $354.28m (US$254.4m), according to an announcement.

This follows approval granted by shareholders and the satisfaction of conditions precedent. Japfa continues to own a 75% stake in AustAsia, which operates the group’s dairy farming business in China.

As part of the agreement, Japfa will continue to manage the farming operations in China, which will supply raw milk to Meiji on the basis of a 5-year rolling contract, renewable annually. Japfa will apply the proceeds of the transaction towards the repayment of the $352.31m (US$253m) term loan.

Japfa already supplies quality raw milk to Meiji for its downstream operations in China, where Meiji is active in the milk and yogurt business, as well as in the ice cream and confectionery business, both of which are steadily expanding.

Japfa CEO Tan Yong Nang said that the strategic partnership will enable the company to build AustAsia to become the largest independent raw milk producer in China and creates value for shareholders.