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Britannia to strengthen dairy sector, to buy out NZ dairy partner Fonterra
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Thursday, 30 April, 2009, 08 : 00 AM [IST]
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Our Bureau, Mumbai
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FMCG major Britannia Ltd on Tuesday announced that it has entered into agreement with Fonterra Brands (Mauritius Holding), Mauritius. The agreement will enable BIL to acquire Fonterra's 49% equity and preference shareholding in Britannia New Zealand Foods (BNZF), their joint venture company engaged in dairy business which was formed in 2002. With this acquisition, Britannia, along with its wholly owned subsidiary will hold the entire equity and preference capital of BNZF.
Announcing the news, Vinita Bali, managing director of BIL, said: "The joint venture of Fonterra and Britannia has created a strong foundation in the dairy business. Britannia intends to pursue profitable growth opportunities in differentiated dairy products and solidify its position as a trusted and leading food brand."
Incidentally, BIL has also announced the restructuring of its dairy business joint venture with Fonterra in India. While commending the good business relationship Fonterra and Britannia have enjoyed over several years, Mark Wilson, Fonterra's managing director, Asia-Middle East, said: "While we are seeing a lot of growth in India, given the fragmented local milk supply that requires significant development, investing in India's consumer dairy market is not a core priority for Fonterra at this time."
A few days ago, Groupe Danone SA announced its decision to sell its entire stake in BIL, to its parent company, Wadia group, through Wadia group's wholly owned subsidiary, Laila Lands (Mauritius). According to industry analysts, Britannia will now strive to strengthen its position in both dairy and branded biscuits sector in the country.
The JV is a Rs 200 crore business and offers a range of dairy products such as cheese, milk powder, butter and ghee. With this buyout, Britannia is expected to merge this arm into the flagship Britannia industries as the front-end of both these companies are tightly integrated.
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