New Zealand's a2 Milk Co Ltd <ATM.NZ> said on Friday it had offered to buy a 75.1% stake in dairy products maker Mataura Valley Milk from China Animal Husbandry Group in a NZ$385 million ($252 million) deal.
The offer follows talks regarding a2's potential investment in Mataura's Southland manufacturing facility, to support the increasing scale of the dairy producer's infant nutrition business.
A2 Milk said it has been granted exclusive rights to conduct due diligence for the potential deal, which would be funded with cash and settled near the end of fiscal 2021.
China Animal Husbandry will retain a 24.9% interest in Mataura Valley Milk, a New Zealand-based milk and nutritional powders maker.
The potential investment in the manufacturing facility aligns with a2's objective to complement current strategic relationships with Synlait Milk <SML.NZ> and Fonterra <FCG.NZ>, a2 Chief Executive Officer Geoffrey Babidge said in a statement.
A2, which is Synlait's second-largest shareholder with a 19.84% stake according to Refinitiv Eikon data, last year extended a supply deal for nutritional products with Synlait till July 2025.
(Reporting by Yajush Gupta in Bengaluru; Editing by Devika Syamnath and Shinjini Ganguli)
