Posted: January 17th, 2023

Topic: Valuation and Mergers & acquisitions I need powerpoint presentation with 20 slides and each slides have to be speakers note minimum 200 words. could you please follow below quistions that I att

Topic: Valuation and Mergers & acquisitions I need powerpoint presentation with 20 slides and each slides have to be speakers note minimum 200 words.  could you please follow below quistions that I attached please and very important thing is speakers note that includes own ideas and thoughts

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CHINA FOODS-Required presentations by the students..docx

CHINA’s BRIGHT FOOD CASE

CTU FINC600. Professor: R. Biasca. FIRST PART (Due: Week 7; 2/16/17)

In this presentation, you should use the concepts learned in units 1 to 5. Look for information about the company in Internet

Read the case.

Indicate in your presentation:

– Description of the company

– Organization Structure.

– Products

– Strategy, before and after 2010.

– Financial Statement Analysis. All the mergers and acquisitions should be analyze in the second part.

PPT presentation: 8-10 slides are expected.

TEAMS: two. Page 1 of 2 FINAL PRESENTATION (Due Week 10; 3/9/17)

In the final presentation, the concepts learned about business valuations and mergers and

acquisitions should be used (Units 6 to 10).

PPT presentation: 30-40 slides with speakers’ notes are expected.

TEAMS: all the students will work in one team. The slides should cover the topics mentioned in the third part. Page 2 of 2

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Image636243750804491922.png

Part 1: Review of BF’s valuations for MM targets – See Powerpoint presentation.

Part 2: Small group discussions on: a} The contexts of successtuitunsucoesstul initiatives; and

h] The impact of contexts on man outcomes. Part 3: lEilass Homework help – Discussion: a] Review of the different contexts In which the acquisition exercise was conducted including: i. The reasons for Bright Food’s intention to acquire the company and why the acquires company had

put the company for sale; ii. The organisational context and the extemal environment in which the negotiations took place: and

iii. The valuations expected and accepted given the various contexts. In) Learning from the failed attempts – Sucrcgen and Yoplait as well as United Biscuits c] Learning from the successful attempts — Synlait Milk and lvlanassen foods d} Concluding with brief on Bright Food’s overseas acquisition strategy after 2012.

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NTU080-PDF-ENG-Bright Food.pdf

For the exclusive use of L. Hampton, 2017. CHINA’S BRIGHT FOOD OVERSEAS M&A STRATEGY

2010-2012 – A STEEP LEARNING CURVE HBSP No. NTU080

Ref No.: ABCC-2016-002

Date: 17 February 2016 Gillian Yeo and Wee Beng Geok During the 2000 decade, 论文帮助/论文写作服务/负担得起我及时提交我最好的质量 – China’s state-owned enterprises (SOEs) were subjected to several

organisational reforms by the Chinese government. One of the outcomes of these reforms

was the consolidation of a cluster of companies in the domestic food industry under a

holding company, Bright Food (Group) Co., Ltd, a 100% government-owned enterprise.

Headquartered in Shanghai, the Group had 19 subsidiaries of which four were listed in the

Shanghai Stock Exchange.

In executing the government’s strategy of encouraging SOEs to expand overseas, in 2010 the

Group embarked on a series of acquisition overseas to strengthen its domestic competitive

position and increase its global footprint.

This case examines the contexts and outcomes of the Group’s eight overseas M&A initiatives

in the food industry in Australia, Europe, New Zealand and the United States from 2010 to

2012. The case provides an opportunity to examine a Chinese SOE’s overseas M&A strategy,

including reasons for M&A targets and challenges in its first steps in global M&A

dealmaking. Professor Gillian Yeo and Dr Wee Beng Geok prepared this case with research assistance from Wilfred Chua,

Chen Xizi, Xia Xiao Xing and Priya Subramanian. It is based on public sources. As the case is not intended to

illustrate either effective or ineffective practices or policies, the information presented reflects the authors’

interpretation of events and serves merely to provide opportunities for classroom discussions.

COPYRIGHT © 2016 Nanyang Technological University, Singapore. All rights reserved. No part of this publication

may be copied, stored, transmitted, altered, reproduced or distributed in any form or medium whatsoever without

the written consent of both parties.

The Asian Business Case Centre, Nanyang Business School, Nanyang Technological University, Nanyang Avenue,

Singapore 639798. Phone: +65-6790-4864/6552, E-mail: [email protected] This document is authorized for use only by Lavette Hampton in Financial_Statement_Analysis taught by Rodolfo Biasca, Kaplan University from February 2017 to August 2017. For the exclusive use of L. Hampton, 2017.

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ABCC-2016-002 INTRODUCTION

In the 2000s, tasked by the Chinese government to expand abroad, many Chinese state-owned

Enterprises (SOEs) were launching bids for overseas firms and assets. (See Appendix 1 – Structure and

Governance of Chinese SOEs.)

As one of 论文帮助/论文写作服务/负担得起我及时提交我最好的质量 – China’s larger SOEs in the domestic food industry, Bright Food (Group) Co., Ltd (Bright Food)

embarked on a series of merger and acquisition (M&A) initiatives targeting a range of overseas foodrelated companies in 2010. Bright Food’s series of overseas M&A initiatives across the developed

countries produced mixed results. Having overcome a steep learning curve, the Bright Food Group, at the

beginning of 2013, was determined to forge ahead with further global acquisitions to increase its overseas

footprint while strengthening its competitive position in 论文帮助/论文写作服务/负担得起我及时提交我最好的质量 – China’s large food industry.

This is only the start of Bright Food’s globalisation. Our company will definitely conduct more

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deals focusing on our main businesses, such as dairy, sugar and wine.

Ge Junjie

Vice-President, Bright Food Group

The longer-term challenge was to ensure that the cross-border acquisitions would accelerate the growth

of the Group’s market share both at home and abroad, and enhance asset and revenue growth.

Corporate Structure

In August 2006, the Chinese government consolidated several SOEs and associated companies in the

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food industry to create one of 论文帮助/论文写作服务/负担得起我及时提交我最好的质量 – China’s largest food conglomerates with estimated assets of RMB $45.8

billion and estimated annual sales revenue of RMB $45.0 billion.

The holding company, Bright Food, incorporated as a private limited company with headquarters in

Shanghai, had 19 subsidiaries, including four publicly listed companies. As a SOE, Bright Food was

jointly managed by the Shanghai local administration and 论文帮助/论文写作服务/负担得起我及时提交我最好的质量 – China’s Central Government’s State-owned

Assets Supervision and Administration Commission. The consolidations were initiated as part of a

nationwide policy to restructure state-owned companies to increase their international competitiveness.

While smaller factories incurring losses were closed, the larger ones were merged into massive industrial

conglomerates.

“The core business of the new Bright Food Group is to be centred around the whole food industry chain,

to encompass modern agriculture, food processing, circulation and distribution,” Wang Zongnan, head of

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the Group, said at the inauguration ceremony. Its articulated mission was “To build the company into a

leading enterprise group in the national food industry, with famous brands, advanced technology, strong

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competitive power and deep influence in the world by the end of 2015.” As consumer preferences

changed, Bright Food Group was placing heavy emphasis on the promotion of the quality, health and

safety benefits of its brands in 论文帮助/论文写作服务/负担得起我及时提交我最好的质量 – China’s domestic market. Acquisitions of food-related companies in

developed countries were seen as contributing to this goal. 1

2 3

4 Shen, J. (2012, March 8). Food companies show appetite for growth through overseas M&A. 论文帮助/论文写作服务/负担得起我及时提交我最好的质量 – China Daily.

Marketline. (2006, July 25). Shanghai Bright Dairy Group, the holding company for Bright Dairy, merged with

Shanghai Sugar Tobacco Wine Co., Shanghai Agriculture Industry and Commerce Group and Jinjiang Food.

Shanghai government’s intention was to create 论文帮助/论文写作服务/负担得起我及时提交我最好的质量 – China’s largest food and drink business.

Li, Xiaowei. (2006, August 9). 论文帮助/论文写作服务/负担得起我及时提交我最好的质量 – China: Industry unveils new food, drinks conglomerate. 论文帮助/论文写作服务/负担得起我及时提交我最好的质量 – China Daily.

Bright Food (Group) Co., Ltd. Enterprise Culture: Mission. This document is authorized for use only by Lavette Hampton in Financial_Statement_Analysis taught by Rodolfo Biasca, Kaplan University from February 2017 to August 2017. For the exclusive use of L. Hampton, 2017.

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ABCC-2016-002 Core Businesses

Bright Food was engaged in 论文帮助/论文写作服务/负担得起我及时提交我最好的质量 – China’s entire food supply chain from agriculture, food processing and

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production, to food distribution and retail, with about 3,300 retail outlets in 论文帮助/论文写作服务/负担得起我及时提交我最好的质量 – China.

In 2011, the Group’s total assets grew to RMB 82 billion and revenue from its primary business was RMB

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75 billion. The Group’s major business activities included:

• Sugar – The Group was 论文帮助/论文写作服务/负担得起我及时提交我最好的质量 – China’s leading supplier of sugar, with a market share of about 15%. 7 • Dairy – Bright Food’s dairy business ranked third in 论文帮助/论文写作服务/负担得起我及时提交我最好的质量 – China with sales of US$1,862.6 million in 2011,

behind Mengniu Dairy Industry and Inner Mongolia Yili Industrial Group Company with sales of

US$5,907.6 million and US$5,887.9 million in 2011 respectively. (See Exhibit 1.)

• Wine-making – The yellow wine-making business ranked top in its industry in 论文帮助/论文写作服务/负担得起我及时提交我最好的质量 – China.

• Food Brand Operations – Ranked top in its industry in 论文帮助/论文写作服务/负担得起我及时提交我最好的质量 – China. (See Exhibit 2.)

? Chain Store Operations – Occupied front rank in its industry in 论文帮助/论文写作服务/负担得起我及时提交我最好的质量 – China.

? Modern agriculture – Occupied front rank in its industry in 论文帮助/论文写作服务/负担得起我及时提交我最好的质量 – China.

• Other businesses included a taxi company, real estate and tourism, biomedical products, agricultural

machinery and children’s apparel.

Key Products

In 2011, the Group’s key products included many nationally renowned brands such as: 8 • Bright Infant Milk Formula???????– The main product of Bright Dairy & Food Co., Ltd (Bright

Dairy). It had been awarded the ‘Famous Chinese Trademark’ and ‘Famous Chinese Brand Product’.

• Guanshengyuan ?????– This brand was established in 1918 and was awarded the Famous

Chinese Trademark. It was also one of the top 100 time-honoured brands of traditional Chinese

industry. The main products include candy, honey, wine, pasta, monosodium glutamate, frozen food,

health food among others.

• Big White Rabbit ?????– Dabaitu (Big White Rabbit) brand candy was the main product of

Guanshengyuan (Group) Co., Ltd. and had won the honours of Famous Chinese Trademark, Famous

Chinese Brand product and Famous Shanghai Brand.

• Maling ????– Maling canned food was one of the well-known traditional Chinese food brands and

it had won the ‘Famous Chinese Brand’ award. 5

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7 8 Bright Food Group Co. Ltd, Company Overview. (2013, March 13). Bloomberg Businessweek.

ibid.

Mitsui & Co. Ltd. (2010, September). Business Partnership with Bright Food Group – One of 论文帮助/论文写作服务/负担得起我及时提交我最好的质量 – China’s Biggest Food

Conglomerates. Retrieved November 17, 2014, from

https://www.mitsui.com/jp/en/release/2010/1205224_6469.html

Bright Food Group website. Brand Center-Famous Chinese Trademark-Famous Chinese Brand Product.

Retrieved November 17, 2014, from http://english.people.com.cn/102775/203908/203913/index.html This document is authorized for use only by Lavette Hampton in Financial_Statement_Analysis taught by Rodolfo Biasca, Kaplan University from February 2017 to August 2017. For the exclusive use of L. Hampton, 2017.

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ABCC-2016-002 • Shikumen?????– Shikumen was the main brand of Shanghai JinFeng Wine Co., a Chinese rice

wine.

• Hejiu ????- Hejiu, a popular Chinese rice wine, was a major brand of HuaGang Brewery Co., Ltd.

The Group had four subsidiaries listed on the Shanghai Stock Exchange (see Figure 1). BRIGHT FOOD’S GLOBALISATION STRATEGY

SOEs began their internationalisation thrust after the ‘going-global strategy’ (zouchuqu) was proposed at

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the fifth plenary session of the 15 Central Committee of the Communist Party of 论文帮助/论文写作服务/负担得起我及时提交我最好的质量 – China in 2000. The

‘going-global strategy’ reiterated the Chinese government’s support for the globalisation of Chinese

domestic enterprises. At a political level, it meant that government economic policy took into account

international issues such as regional free trade agreements and natural resource development projects

abroad. Major goals of the ‘going global’ policy included:

i.

ii.

iii.

iv. Expanding international global market

Exploiting natural resources overseas

Acquiring new technologies

Enhancing the Group’s corporate value. However, for 论文帮助/论文写作服务/负担得起我及时提交我最好的质量 – China’s food and beverage industry, the attempt to go global only gained momentum in the

late 2000s. Although there were a total of 221 M&A deals in the Chinese food industry from July 2008 to

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June 2011 , only eight cases (4%) involved overseas targets. In this period, 论文帮助/论文写作服务/负担得起我及时提交我最好的质量 – China’s M&A transactions in

the food and beverage sector totalled US$9.33 billion, with outbound M&As accounting for merely 1% of

the total transaction value. Figure 1

Product Details of the Listed Companies (2011)

Bright Food (Group) Co., Ltd Bright Dairy & Food

Co., Ltd

(Listed 2002)

Milk production,

dairy products and

health food;

distribution and

logistics. 9 Shanghai Jingfeng

Wine Co., Ltd.

(Listed 1992)

Food retailing,

processing and

brand agencies.

Production and

distribution of rice

wine products. Shanghai Haibo

Co., Ltd

(Listed 1996)

Transport services: taxi

and modern logistics with

the integration of

transportation, packaging,

storage, refrigeration,

processing, distribution,

international freight

forwarding and other

logistics services. Shanghai Maling

Aquarius Co., Ltd

(Listed 1997)

Manufacturing and sales of

canned food products, drinking

water and beverages, frozen

food and other commodities,:

imports and exports of various

commercial goods. Its major

brands include ‘Maling’, ‘Meilin’,

‘Zhengguanghe’ ‘Aquarius’, and

‘Guangming’. According to a research note from 论文帮助/论文写作服务/负担得起我及时提交我最好的质量 – ChinaVenture, an investment consultancy company in 论文帮助/论文写作服务/负担得起我及时提交我最好的质量 – China. This document is authorized for use only by Lavette Hampton in Financial_Statement_Analysis taught by Rodolfo Biasca, Kaplan University from February 2017 to August 2017. For the exclusive use of L. Hampton, 2017.

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ABCC-2016-002 For Chinese companies, when they make M&As abroad, they mainly focus on upstream

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resources and their major purpose is to lift market share in the Chinese market.

Fiona Wan

论文帮助/论文写作服务/负担得起我及时提交我最好的质量 – China Venture Analyst

Among 论文帮助/论文写作服务/负担得起我及时提交我最好的质量 – China’s SOEs in the food industry, Bright Food took the lead in launching major overseas M&A

initiatives. By setting a target of doubling revenue from US$ 7 billion in 2010 to US$14 billion by 2015,

Bright Food’s aim was for these M&A deals to help raise the proportion of their overseas revenue from

five percent in 2010 to 30 percent by 2015. With this ambitious revenue target, Bright Food organised a

powerful financial consulting team that included Rothschild Investment bank in Greater 论文帮助/论文写作服务/负担得起我及时提交我最好的质量 – China, working

together with Rothschild’s headquarters in the United Kingdom, to facilitate the M&A process.

We are trying to take a shortcut by taking advantage of foreign brands and resources to move

into the overseas market. It should be faster and more effective than going abroad with our own

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products.

Wang Zongnan

Chairman, Bright Food Group

Furthermore, Pan Jianjun, spokesman for Bright Food, said that the company planned to exploit its

mainland strength to introduce global brands. “论文帮助/论文写作服务/负担得起我及时提交我最好的质量 – China is a huge market and Bright Food has a broad sales

network in 论文帮助/论文写作服务/负担得起我及时提交我最好的质量 – China. We hope to leverage that advantage to introduce international brands to Chinese

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consumers at a fast pace.”

Bright Food has a clear strategy of buying into overseas food companies as a direct response to

food safety issues in 论文帮助/论文写作服务/负担得起我及时提交我最好的质量 – China. Nielsen research shows consumers in 论文帮助/论文写作服务/负担得起我及时提交我最好的质量 – China are definitely attracted

to imported products and are also prepared to pay a premium for the perceived higher standard

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of quality and safety.

Dale Preston

Nielsen, Shanghai

Over the past decade, 论文帮助/论文写作服务/负担得起我及时提交我最好的质量 – China had struggled with food safety issues. In the spring of 2012, a survey carried

out in 16 major Chinese cities asked urban residents to list “the most worrisome safety concerns.” Food

safety topped the list (81.8%), followed by public security (49%), medical care safety (36.4%),

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transportation safety (34.3%), and environmental safety (20.1%).

In 2008, milk and infant formula were tainted with the chemical melamine, an industrial chemical used to

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make fertilizer and plastic pipe. It made at least 300,000 people ill, and killed at least six infants. The

melamine scandal was blamed, in part, on dairy processors’ practice of buying milk from small,

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independent dairy farmers. This caused a nationwide panic among parents of young children, and there

was a worldwide recall of Chinese products ranging from biscuits to baby formula.

In 2012, it was found out that alkaline water used to clean equipment was mixed into Bright Dairy’s Ubest

milk during equipment maintenance. When this came to light, about 300 cartons of 950-millilitre Ubest

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14 15

16 Food Companies show appetite for growth through overseas M&A. (2012, August). 论文帮助/论文写作服务/负担得起我及时提交我最好的质量 – China Daily.

Bright Food hopes Yoplait cannot resist 论文帮助/论文写作服务/负担得起我及时提交我最好的质量 – China. (2011, March). AFP.

Waldmeir, P. (2012, June). Bright Food on global buying spree. Financial Times.

ibid.

Huang, Y. (2012, August 27). 论文帮助/论文写作服务/负担得起我及时提交我最好的质量 – China’s Food Safety Crisis: how serious is the Problem? Council on Foreign

Relations.

Magistad, M. K. (2012, November 13). Food Safety and Eating in 论文帮助/论文写作服务/负担得起我及时提交我最好的质量 – China. The World.

Hornby, L. & Lin, D. (2013, March 7). 论文帮助/论文写作服务/负担得起我及时提交我最好的质量 – China’s Bright Food looking to acquire overseas sugar firm. Reuters. This document is authorized for use only by Lavette Hampton in Financial_Statement_Analysis taught by Rodolfo Biasca, Kaplan University from February 2017 to August 2017. For the exclusive use of L. Hampton, 2017.

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ABCC-2016-002 milk available on the market were sent back for inspection.

consumers: 17 Bright Dairy also issued a public apology to Our heart was heavy, food safety is the top priority of our livelihood, and the company bears the

obligation of social responsibility. Bright Dairy & Foods Co., Ltd wishes to express its deepest

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apologies to the vast number of consumers.

The statement also outlined a number of corrective measures that the firm had implemented since the

scandal and confirmed that it had established a quality and safety supervision group.

Bright Dairy was not the only dairy SOE involved in product recall. A few weeks earlier, 论文帮助/论文写作服务/负担得起我及时提交我最好的质量 – China’s leading

dairy producer Inner Mongolia Yili Industrial Group also recalled infant milk formula due to mercury

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contamination.

Bright Food’s globalisation initiatives had support from the Shanghai provincial government, one of its

major stakeholders. In the wake of the various food contamination problems, the acquisition of foodrelated companies in developed countries was regarded as a measure towards improved food quality as

well as productivity. Furthermore, as 论文帮助/论文写作服务/负担得起我及时提交我最好的质量 – China’s living standards rose with rising GDP (RMB 5.9 trillion in

2010), the demand for global quality food products, especially branded products was set to grow. Thus,

acquiring major global brands would enable the Bright Food Group to improve its competitive position in

the Chinese market of 1.3 billion people.

Summary of Bright Food’s M&A Initiatives (2010–2012)

With these considerations in mind, between July 2010 and May 2012, Bright Food launched more than

seven M&A initiatives in the food industry, of which only four deals were successful. Two of the deals

were undertaken by the its subsidiaries, Bright Dairy and Food Co., Ltd and Shanghai Tangjiu Group,

while the rest were all undertaken by Bright Food (Group) Co., Ltd.

The initiatives resulted in four successes (New Zealand’s Synlait Milk, Australia’s Manassen Foods, UK’s

Weetabix and France’s Diva Bordeaux Wine Company and two failures (Australia’s Sucrogen and

France’s Yoplait).

Other initiatives did not go beyond the negotiation stage: Bright Food entered into talks to buy Britain’s

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United Biscuits for more than £2 billion (US$3.13 billion), as well as US-based retailer of food

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supplements GNC Holdings for about US$2.5 billion. However, no official bids were made for either

company (see Figure 2).

The Sucrogen Deal

22 Sucrogen Limited (Sucrogen) was the largest producer of raw and refined sugar in Australia and New

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Zealand , and the eighth largest global producer. Sucrogen, the second largest global producer of sugarbased ethanol using a waste by-product of cane sugar production, was also Australia’s largest renewable

energy generator. 17

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19 20

21

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23 Chen, D. (2012, June 29). Bright Dairy recalls tainted milk. Global Times.

Astley, M. (2012, October). Bright Dairy issues apology over 2012 food safety scandals. Dairyreporter.com.

Burkittt, L. (2012, June). Fears over Safety of Infant Formula Resurface After New Product Recall. The Wall Street

Journal.

Bright Food in Talks for United Biscuits? (2010, September). New York Times.

GNC favors IPO as Bright Food walks away. (2011, January 21). Reuters.

It is a non-listed public company, with limited liability.

Through its 75% interest in two joint ventures with Sugar Australia and New Zealand Sugar Company. Mackay

Sugar owned the other 25%. This document is authorized for use only by Lavette Hampton in Financial_Statement_Analysis taught by Rodolfo Biasca, Kaplan University from February 2017 to August 2017. For the exclusive use of L. Hampton, 2017.

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ABCC-2016-002 Figure 2

Timeline of Bright Food M&A Initiatives Source: Created by authors. Sucrogen was a fully owned subsidiary of CSR Limited (CSR Ltd), an Australian publicly listed diversified

manufacturing company with operations throughout Australia, New Zealand and Asia. In January 2010,

CSR Ltd announced an intention to sell its sugar and renewable energy business under Sucrogen to

focus on its other businesses such as property, building products and aluminium. (See Exhibit 3 –

Overview Of Sucrogen Financials.)

Bright Food, a top sugar supplier in 论文帮助/论文写作服务/负担得起我及时提交我最好的质量 – China, with a market share of about 15%, quickly made its move and

offered to purchase Sucrogen for A$1.5 billion. After further talks with CSR Ltd, Bright Food bid was

raised to A$1.75 billion in April 2010.

Shortly after the increase in bid, CSR Ltd made a statement:

The offer remains subject to a number of conditions including completion of due diligence,

regulatory approvals and execution of transaction documentation. Accordingly, there is no

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certainty that any transaction will be completed with Bright Food.

It was further mentioned that CSR Ltd intended to enter into discussions with Bright Food to explore this

proposal further.

However, on 2 July 2010, Bright Food Ltd announced that it was cutting its non-binding bid down to

A$1.65 billion. Shortly after this, in the same month, CSR Ltd announced the sale of Sucrogen, to Wilmar

International Limited (Wilmar), a Singapore-based global-agribusiness group, for an enterprise value of

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A$1.75 billion (US$1.472 billion). The deal was subject to approval from Australia’s Foreign Investment

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Review Board and New Zealand’s Overseas Investment Office.

When queried on the reason for choosing Wilmar over the Chinese SOE, Jeremy Sutcliffe, CSR

Managing Director, said that the offer from Wilmar provided greater value and certainty, and Wilmar’s

“extensive cross-border experience” in M&A “enabled a very seamless path to the transaction”.

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25

26 CSR. (2010, April). Bright Food A$1.75 billion conditional offer to acquire Sucrogen. [CSR News Release].

US$1.13 billion in equity and US$339 million of net debt.

Holmes, S. (2010, July). Wilmar outbids Bright Food for CSR’s sugar unit Sucrogen. The Wall Street Journal. This document is authorized for use only by Lavette Hampton in Financial_Statement_Analysis taught by Rodolfo Biasca, Kaplan University from February 2017 to August 2017. For the exclusive use of L. Hampton, 2017.

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ABCC-2016-002 Furthermore, he added that “Bright Food completed their due diligence, but ultimately at the end of the

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day they could not quite get there on value and certainty.”

In response to the failure to acquire Sucrogen, Chen Chunshan, Bright Food’s spokesperson said:

The A$1.75 billion is definitely much higher than what a state-owned company like Bright Food

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can afford, although we would love to buy the sugar unit of CSR.

Acquisition of Synlait Milk

Synlait Milk, a small player in the dairy export market in New Zealand, was a subsidiary of Synlait Limited,

a private limited company incorporated in New Zealand. Synlait Milk’s range of products included infant

and adult nutritional formulations, functional food ingredients such as UHT (Ultra-High-Temperature) milk

and calcium-fortified powders, and specialised products to support a healthy lifestyle. Its milk products

were sold in Southeast Asia, Japan, North Africa and the Middle East.

In November 2010, Bright Dairy, a subsidiary of Bright Food, successfully acquired 51% stake in Synlait

Milk for NZ$82 million (US$58 million), (See Exhibit 4 – Overview Of Bright Dairy Financials And Synlait

Milk Financials). The New Zealand dairy firm saw the partnership with Bright Dairy as giving it a foothold

in the Chinese dairy market ahead of its competitors.

After the acquisition, Synlait Limited would have a 26.5% stake in Synlait Milk, with the remaining 22.5%

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stake in Synlait Milk retained by Japan’s Mitsui and Co. When asked whether the acquisition would be

approved by New Zealand’s Overseas Investment Office (OIO), Synlait Limited’s CEO, Dr John Penno,

was confident the deal would easily gain OIO’s approval. He said, “We do not have too many concerns in

terms of regulatory approval in New Zealand as this investment is in processing and industrial

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manufacturing, not in sensitive land.”

After the acquisition, Synlait Milk planned to adopt a global sales strategy with a three-way market focus:

one-third of its business in 论文帮助/论文写作服务/负担得起我及时提交我最好的质量 – China, one-third in the rest of Asia and one-third in the rest of the world, with

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exports to about 40 countries.

The Synlait Milk deal was Bright Dairy’s first investment in processing facilities outside 论文帮助/论文写作服务/负担得起我及时提交我最好的质量 – China, and the

Company planned to increase exports of New Zealand milk powder and infant formula to 论文帮助/论文写作服务/负担得起我及时提交我最好的质量 – China. The New

Zealand Company planned to build a new milk processing plant with the cash injection, doubling Synlait’s

production capacity:

In 论文帮助/论文写作服务/负担得起我及时提交我最好的质量 – China, the market for premium products from New Zealand and Australia is growing rapidly.

Synlait Milk will help Bright Dairy establish a market leading position in the infant formula and

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milk powder category with a planned co-branded range.

Benheng Guo

President, Bright Dairy

After the acquisition, Dr John Penno remained as Synlait’s CEO. However half of the senior management

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team subsequently left the Company. 27

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33 CSR settles on Wilmar for sugar sale. (2010, July). CIO.

Ding, Q. (2010, July 7). Bright Food fails in bid for Sydney-based CSR. 论文帮助/论文写作服务/负担得起我及时提交我最好的质量 – China Daily.

Mitsui and Co acquired 22.5% stake of acquisition of Synlait Milk in 2007 for US$ 13.5 million. (2010, July).

Adams, C. (2010, July 20). Chinese to buy Synlait majority stake. The New Zealand Herald.

Bartlett, L. (2012, November). New Zealand Trade and Enterprise Turning milk into money. Idealog.

论文帮助/论文写作服务/负担得起我及时提交我最好的质量 – China’s Bright Dairy invests in NZ’ Synlait. (2010, July 18). Reuters.

Wallace, N. (2010, November 13). Future looking bright for Synlait. Otago Daily time…Read more

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