KARACHI: Engro Corporation Limited has announced to sell a controlling 51 percent stake in its foods subsidiary to a Dutch dairy cooperative in a deal valuing around $448 million, the country’s second-biggest listed dairy firm said.
“The company (Engro Corporation) agreed to sell up to 51 percent of the shares of Engro Foods Limited to FrieslandCampina Pakistan Holdings BV of the Netherlands in terms of a sale and purchase agreement,” it said in a notice issued to the Pakistan Stock Exchange.
FrieslandCampina is one of the world’s largest dairy companies with around 19,000 member farmers and annual revenues of more than 11 billion Euros. The Dutch firm, expressed its intention to acquire Engro Foods in last March, has agreed buy about 391 million or 51 percent controlling stakes.
Engro Corporation holds more than 87 percent in its wholly-owned foods subsidiary. Citigroup Global Markets Ltd. in London is the financial adviser to the deal, while the Pakistan unit of the bank is the manager.
“This is a defining moment for Pakistan,” Hussain Dawood, chairman of Engro Corporation said. “This partnership enables us to provide a wider array of affordable high quality dairy products for a healthier Pakistan, especially for its younger population.”
The execution of the transaction, the country’s single largest private sector foreign direct investment, is subject to approval of competition and other relevant authorities.
The notice said the companies agreed the sale price on a cash and debt free basis of Rs96.6 billion to be adjusted for certain items, including debt and debt-like items, cash and cash equivalents and working capital.
