FrieslandCampina buys Ivory Coast dairy business from Olam
AMSTERDAM, Sept 1
AMSTERDAM, Sept 1 (Reuters) - Dutch farming cooperative Royal FrieslandCampina, one of the five largest dairy companies in the world, said on Monday it will buy the Ivory Coast dairy businesses of Singapore's Olam International.
The acquisition fits into the growth strategy of leading dairy producers to boost activities in emerging markets in Africa and Asia, and counterbalance more limited long-term growth in developed markets.
In July, France's Danone bought a 40 percent stake in Kenya's Brookside, east Africa's top dairy producer, as part of plans to expand in new markets while growth is weak in Europe.
Last week, New Zealand's Fonterra, the world's largest dairy producer, said it would take a stake in Chinese baby food and formula maker Beingmate.
In a separate statement, Olam said FrieslandCampina was paying $18.7 million cash for the business and $6.3 million for the right to use Olam's "Pearl" trademark in certain African countries.
Olam said it expected to book a one-off pre-tax gain of about $10 million when the transaction is completed in the second quarter of its 2015 financial year, or the three months ending Dec. 31, 2014.
The acquisition includes a dairy production facility in the Ivorian commercial capital Abidjan that employs 80 people. It processes local fresh milk and milk powder into sweetened condensed milk and evaporated milk for the local market.
"(The acquisition) enables us to further strengthen our position in West Africa," said FrieslandCampina chief executive Cees 't Hart. The company already has a presence in the West African countries of Ghana and Nigeria.
Olam said the sale was part of a plan to focus its dairy products portfolio on upstream and midstream parts of the dairy business. It has dairy farms in Uruguay and Russia.
FrieslandCampina has more than 21,000 employees and annual revenues of more than 11 billion euros ($14.4 billion). ($1 = 0.7612 Euros) (Reporting By Thomas Escritt; editing by David Clarke)