FrieslandCampina Pakistan BV (FC Pakistan), one of the top 5 dairy companies in the world with annual revenue of 11.4 billion euro, has acquired a majority stake in Engro Foods for an estimated amount of $446.81 million.
The dairy giant is expected to bring in new methods of production, distribution, and organization that lead to operational efficiency and customer satisfaction. As a part of its deal with Engro Foods, FrieslandCampina has acquired 51% stake in the Pakistani food giant.
Engro Corporation, the parent company of Engro Foods, has sold 47.1% of its stake in the company to Netherlands-based dairy giant. The rest of the stake (3.9% or 29.66 million shares) was sold by other groups at a cost of Rs 120 ($1.14) per share.
The total stake acquired by FrieslandCampina accounts for 51% of the Engro’s total common stock. The total share acquired by the Netherlands-based firm worth over Rs 390.95 million.
Following the news, the share price of Engro Foods fell by 1.05%; started from Rs 1.82, and closed at Rs 170.03 with a size of 1.34 million shares, according to the statistics of Pakistan Stock Exchange, released on Dec. 19. However, the share price of Engro Corporation climbed by 0.81%; started at Rs 2.53, and closed at Rs 311.08 with a total size of 555,100 shares.
The information has been obtained from the notification of an acquisition sent to the Pakistan Stock Exchange on Monday. The Chairman of Engro Foods Board of Directors, Samad Dawood, has been optimistic about the deal, saying the benefits were significantly clear for all to see. He said:
“Not only was Engro Foods able to achieve its vision of elevating consumer delight and well being by adding nourishment to the food market but the company was able to enhance the lives of 12 million consumers through its utmost sincerity and motivation each and every day.
This is only the beginning of a better and brighter future for our organisation and this novel partnership with the Royal FrieslandCampina Group will not only bring growth and prosperity for all of us but will also tell a story about Engro’s commitment to growth and creating a broad-based impact for now and generations to come.”
The company maintains that the final sale price would be calculated within 40 days after preparation of closing statements, which are currently under preparation. As per the sale and purchase agreement, any price difference between the estimated sale price and the final sale price – reflecting the adjustment for certain items including debt and debt-like items, cash and cash equivalents and working capital – will be settled between Engro Corp and FrieslandCampina Pakistan in the following days.