Tokyo-based Asahi announced earlier today that its subsidiary, Asahi Group Holdings Southeast Asia, had reached an agreement with Etika International Holdings to purchase all the issued shares of the company’s Southeast Asian dairy business for $239m (€172m).
The proposed deal, if completed, will see Asahi acquire manufacturer Etika Dairies and 11 other packaging, marketing and distribution companies.
Etika Dairies manufactures a range of UHT milk products under the Goodday brand and holds the “second largest share in Malaysia’s condensed and evaporated milk market” with its Dairy Champ range.
Outside Malaysia, Etika boasts operations in Vietnam and Indonesia and exports to other markets in Southeast Asia, the Middle East and Africa.
"Beverage business platform"
Asahi's current portfolio consists of beer and other alcoholic beverages, soft drinks and food.
Through the takeover, which will be subject to a Etika shareholder vote, Asahi hopes to “further enhance” its “beverage business platform in Southeast Asia.”
“In Malaysia and other Southeast Asian countries, dairy products including condensed milk, has been deeply ingrained in the food and beverage culture for a long time and stable growth of the dairy market is expected into the future,” said Asahi in a statement.
It added that the Dairy Champ brand has “wide penetration in the Malaysian consumer market” and that Goodday is “well-recognized as a premium brand in Malaysia and is steadily increasing its market share.”
Dairy "origins"
Etika International Holdings, which is headquartered in Singapore and Kuala Lumpur, "has its origins" as a manufacturer and distributor of condensed and evaporated milk under the Dairy Champ brand.
Despite its history, Etika believes that the proposed sale "provides a good opportunity for the group to unlock value in the business and consequently maximise returns to its shareholders."
It has since expanded into frozen food, beverages, nutrition and packaging.
“The Board is of the view that the consideration offered represents an attractive price for the value of the Group’s dairies and packaging business," Etika said in a statement.
It added that the proceeds, should the sale go ahead, will be used to repay bank borrowings, "thus strengthening the financial position of the group, to finance the growth of the remaining businesses and to capitalize on other business opportunities to enhance the long term value for shareholders.”