As domestic dairy companies shift their overseas goals from resource acquisition to market expansion, overseas M&A has become increasingly difficult. Recent reports about Yili's high-priced bid for Australia's largest dairy, Murray Goulburn, have drawn attention. A Yicai reporter learned that although Yili denies the foreign media reports, there are suspicions that international intermediaries may have deliberately leaked information to raise the bidding threshold. In recent years, as domestic dairy companies have matured, they have gradually aimed their market expansion at overseas markets, which has also made competitors wary. On September 20, foreign media reported that Yili was acquiring Murray Goulburn at double the price. Late that night, Yili issued an announcement confirming that it had indeed participated in the strategic development plan of Murray Goulburn Co-operative Co. Limited (Murray Goulburn), which intended to solicit strategic development proposals through this process. However, Yili pointed out that the media reports about the company's first-round bid price were inaccurate. Media reports claimed that Yili's offer was estimated at A$1.2 per trust unit, nearly double the trust's share price before Murray Goulburn announced the asset sale. Murray Goulburn also issued a statement on September 21, confirming that it had received multiple confidential, non-binding indicative proposals, but denied that any company had offered A$1.2 to acquire the Murray Goulburn trust. However, a Yicai reporter learned from a person close to Yili that Yili was dissatisfied with the disclosure of acquisition details. According to this person, there is a possibility of encountering competitor "sabotage" this time. In the previous acquisition of the American company Stonyfield, Yili also encountered "sabotage" when the price was leaked in advance. At that time, Yili offered $850 million, but in the end, Danone sold the company to its compatriot Lactalis for $875 million. Dairy expert Chen Yu told Yicai that acquiring Murray Goulburn could accelerate Yili's layout in the Australian industrial chain, because Murray Goulburn is an export-oriented dairy company. Although Australian milk source costs are higher than in New Zealand, where Yili had previously laid out, Murray Goulburn exports end products and has a broad overseas market. However, some international intermediaries are adept at using the media to maliciously leak or fabricate sensitive information such as quotes, or to create hype through the media to raise the threshold for the target, thereby achieving the goal of increasing the selling price. This is a common "trick" that Chinese enterprises often encounter in overseas M&A. Despite this, Yili remains very interested in Murray Goulburn. Today, Yili responded to Yicai, saying that on one hand, internationalization is an important strategy for the Yili Group, with layouts in Asia, Oceania, and the Americas. On the other hand, Yili values that if the acquisition succeeds, Murray Goulburn's business will form synergies with Yili's existing business. Murray Goulburn is located in Victoria, Australia's largest milk-producing region, exporting to more than 100 countries, with exports accounting for 8% of global dairy trade. Murray Goulburn uses more than 25,000 containers annually. In addition, Murray Goulburn has nine world-class dairy factories and is a world leader in several technological research and development areas. Dairy analyst Song Liang told Yicai that Danone, Nestlé, and other companies are accelerating expansion into emerging markets, especially Southeast Asia, which is also the world's fastest-growing dairy consumption market. However, Southeast Asian markets have more trust in European and American brands. If Yili secures Murray Goulburn, it would be very helpful to enter the market through a third-party platform. In fact, the reporter found that with the rapid growth of domestic dairy companies, their internationalization strategies are changing, gradually shifting from seizing resources to seizing markets. Looking at Yili's two acquisitions, both Stonyfield and Murray Goulburn are large dairy companies with mature technology and products, and a certain market share. Mengniu Dairy is also accelerating overseas market expansion. In the first half of this year, Mengniu's overseas market sales increased by 40% year-on-year, and it will further increase its layout in overseas markets such as Southeast Asia, including plans to invest in local factories in the future, shifting from the current trade model to a local operation model integrating production, supply, and sales. Mengniu President Lu Minfang once told Yicai a case: Mengniu Group participated in an ice cream investment in Indonesia, and in the second year achieved sales of 700 million yuan. Although not consolidated, the potential of the Southeast Asian market is evident. In Song Liang's view, from the experiences of Yili's recent two acquisitions, it is not difficult to see that domestic dairy companies' overseas expansion is facing more obstacles. Around 2010, the previous round of intensive overseas expansion by domestic dairy companies was more about seizing advantageous overseas resources. But as domestic dairy companies began to shift to overseas market expansion, it gradually triggered confrontation from overseas competitors. After all, with the saturation of European and American markets, emerging markets in Asia, which are growing rapidly and have large populations, have become "contested territory." Song Liang said that foreign companies are unwilling to let Chinese dairy companies become stronger, fearing that Chinese companies will take away their share in emerging markets. Moreover, some dairy companies still want to enter the Chinese market and prefer cooperation rather than being acquired by Yili. It is worth noting that it is still hard to say who will ultimately win the Murray Goulburn deal. Murray Goulburn's announcement also stated that it is evaluating the proposals received with Deutsche Bank, but there is no guarantee that any transaction will occur. However, in the industry's view, bidding for Murray Goulburn is very difficult. According to Yan Weibin, chairman of Ausnutria Dairy, who has cooperated with Murray Goulburn, Murray Goulburn is a farmer cooperative company with a large scale. When Ausnutria started, it cooperated with the company, and the company's quality is good. From the company itself, it should be not easy to design a transaction structure to sell, not easy to buy, and even harder to integrate. Source: Yicai, Luan Li The 3rd (CFIC) China FMCG + Internet Conference will be held in Chongqing in November 2017. The conference will closely focus on the theme "New Forces, New Ecology," inviting 1000+ distributors, 500+ brand owners, 200+ B2B platform founders, and 100+ investment and financing institutions to jointly explore a new chapter of cross-border integration! Core topics of this conference:
How can the FMCG industry leverage B2B to achieve new growth opportunities?
How should the new supply chain behind new retail be built?
How can intra-city logistics help B2B achieve leapfrog development?
Highlights of this conference:
The industry's first "2017 China FMCG B2B Industry Competitiveness White Paper"
Case sharing of excellent transformation and upgrading distributors
Exhibition upgraded again, Hall 6 Internet Technology Exhibition strengthens docking
Alibaba Retail Link, GL Capital, EASIA Supply Chain, Best Store Plus, Yijiu Pi, Hdware, and other most well-known enterprise leaders in various fields will give speeches on-site to express pioneering views.
Registration is now open. Long press the QR code below or click "Read Original" to register. Add friend and note "Conference Registration". Click the link below to review the highlights of the first and second FMCG + Internet conferences: 2016 "FMCG + Internet" Summit Forum -END-