Meiji's acquisition of AustAsia is the largest in history

Although there has been a lot of discussion about whether the US and Japanese companies will "fight the battle" in the past few days, Meiji, Japan's largest dairy company, seems to be using real money to set a good "example" for its peers-continue to increase investment in China.

Following the landing of the first plant in North China and the expansion of the Suzhou plant with more than 148 million yuan, Meiji, Japan's largest dairy company, has again invested heavily in the Chinese market in less than a year. Meiji Dairy announced in a notice yesterday that its parent company, Meiji Corporation, acquired a 25% stake in AustAsia Investment Holdings Pte LTD for approximately 28 billion yen (about 1.8 billion yuan). The latter is engaged in ranch operations in China.

Nikkei Chinese reported today that this amount is the largest investment in the history of Meiji mergers and acquisitions. In addition to this transaction, Meiji has announced three investments in the Chinese market in less than a year, with a total investment of about 4 billion yuan.

Ensure a stable supply of raw milk

Meiji stated in a Chinese bulletin that 100% investors of Meiji Dairy (Suzhou) Co., Ltd., Meiji Co., Ltd. and Japfa Corporation, a shareholder of Aoya, reached an equity transfer agreement to acquire Aoya for approximately 28 billion yen 25.0% of the company's shares.

After the completion of the equity acquisition, Aoya will become an affiliate of Meiji Corporation. However, the notification did not provide more detailed information on the future cooperation between the two parties.

Behind the largest acquisition in history was Meiji ’s “reserve ammunition” to meet the growth of fresh milk and yogurt in the Chinese market. The Meiji Bulletin said that due to expanding market size and other reasons, the sales of its refrigerated milk business centered in East China "has grown significantly.

"The company needs to ensure a stable supply of high-quality raw milk in order to achieve the continued growth of its milk and yogurt business in China." Meiji said that the equity acquisition is to strengthen the value chain from raw milk procurement to production Lay a solid foundation for achieving sustainable business growth. "

An industry source mentioned that Meiji's business in China is focused on cold chain products. "The characteristics of this product determine that it must first solve the problem of milk sources when opening up overseas markets."

The above-mentioned person said with fresh milk as an example, Meiji's products are still concentrated in the East China market, and its share in the domestic market is not high, and there is still much room for future development. Under such circumstances, Meiji can only further expand the market by ensuring a stable supply of high-quality milk sources.