(Alliance News) - Associated British Foods PLC on Tuesday said it has struck a GBP48 million deal to acquire Aquis Stock Exchange-listed National Milk Records PLC, strengthening its agriculture arm.
National Milk will join AB Agri, where it will have the AB Vista feed additive business and the Frontier Agriculture crop production and grain marketing unit as stable mates.
AB Foods is a London-based food producer, as well as a clothing retailer via the Primark store chain. NMR provides technology information services to the UK dairy sector and is currently listed on the Aquis Stock Exchange in London.
AB Foods will buy National Milk shares for 215 pence each, an 87% premium to its 115.0p closing price on Monday. The deal values National Milk at GBP48 million.
Shares in National Milk traded 65% higher at 190.00p each in early dealings on Tuesday. AB Foods shares traded 0.1% lower at 1,840.50 pence each on the London Stock Exchange.
AB Foods said: "NMR provides complementary services and technology offerings to AB Agri's existing operations across the dairy supply chain, and AB Agri believes that a combination will enable a better service to the dairy industry, initially in the UK, offering products that deliver increased value, efficiency and ultimately profitability for farmers. AB Agri is excited about NMR becoming part of the broader group and believes that the acquisition will allow NMR to accelerate and de-risk the delivery of its strategy, as well as creating greater opportunities for NMR's customers, employees and wider stakeholders."
The acquisition has support from just under 69% of NMR's shareholders, not far off the 75% needed to seal the deal. The buyout is expected to become effective in the third quarter of 2023.
National Milk Chair Trevor Lloyd said: "As the UK dairy supply chain continues its drive to carbon neutrality, NMR's work with GenoCells and milk data, and our pivotal role in payment testing, will contribute important information to aid in this transition. The backing of ABF will accelerate and de-risk NMR's ability to deliver its strategic objectives, streamlining industry processes by creating a holistic business that can provide end-to-end data and analysis to ensure the long term sustainability, efficiency and profitability of UK dairy."
By Eric Cunha, Alliance News news editor
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