Bega Cheese has been taken by surprise, with an announcement on the Hong Kong stock exchange by its Vitasoy Australia JV partner, Vitasoy International, saying it intends to acquire Bega's share of the plant-based dairy business.
Bega Cheese subsidiary National Food Holdings Ltd owns a 49 per cent share of Vitasoy Australia Products, a shareholding it inherited when it bought Lion’s Dairy & Drinks division in 2021.
The joint venture partner, owning the remaining 51 per cent, is Hong Kong company Vita International Holdings Ltd 51 per cent.
Vita International is a subsidiary of Hong Kong listed company Vitasoy International Holdings Ltd.
Without Bega or NFHL’s knowledge, and according to an announcement by Vitasoy International to the Hong Kong stock exchange this week, the Australian Foreign Investment Review Board has issued a no-objection notification to Vitasoy Int to acquire the remaining 49 per cent held by NFH.
Vitasoy Int said in light of FIRB’s position, it was announcing its intention to exercise the call option and acquire the remaining 49 per cent of Vitasoy Australia.
As part of the Dairy & Drinks business sale to Bega, the shareholders agreement regarding the Vitasoy Australia JV gave Vita International “change of control” rights over Vitasoy Australia.
The provisions gave Vita Int an option to acquire all shares held by NHFL at a price either agreed between the parties or at a fair value determined by an independent expert. The call option could be exercised during a 90-day period from the end of October 2022.
Bega told the ASX that even though the call option period has not commenced and NFHL hasn’t received an exercise notice, Vita Int had lodged its announcement with the Hong Kong stock exchange.
Bega chair Barry Irvin said it recognised the growing market importance of plant-based beverages and products, and if its interest in in Vitasoy Australia was acquired, it would assess its options on continuing its involvement in the sector.
Data from IRI Total Business Scan reports the Australian plant-based milk category is worth $380 million with annual growth of around 11.7 per cent.
According to Bega, the company is second in the market with a 26 per cent market share.
