Fonterra to sell down its 18.8% stake in China’s Beingmate
Aug 08, 2019 (China Knowledge) - Dairy giant Fonterra (FCG) is cutting its 18.8% stake in Chinese infant formula maker Beingmate Baby & Child Food (002570), which is currently worth about NZD 206 million. Fonterra has not clarified the specific amount of the stake it will sell down.
Fonterra acquired a stake in Beingmate for about USD 490.50 million in 2015, hoping to make great profits in the lucrative brand dairy industry in China. However, with the severe downturn of Beingmate's shares price, its has slumped 67% , and it had to book a sharp write-down of NZD 405 million last year.
Fonterra has been dealing with its relationship with Beingmate for some time and the forthcoming selling news has largely affected its current share price. The plan to sell down its stake of Beingmate came after a strategic review, said Fonterra CEO Miles Hurrell.
The company has talked to several parties about the potential sale of its entire stake in Beingmate, but it fails to find a buyer for the poorly performing asset so far. Fonterra's stock has fallen about 19.5% this year. Besides its problems dealing with Beingmate, it has also been struggling with the drought conditions in Australia and New Zealand.
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