Malaysian food processing group Eraser & Nerve said it will make and distribute Nestle milk products in an $84 million deal that promises to help double annual turnover at its dairy division.
F&N will take control of Nestle's canned liquid milk, chilled and dairy and juice business in Thailand as part of the deal, giving it access to the large Thai market, as well as untapped markets in Myanmar and Indochina, the company said on Monday.
"In one stroke, we have gained access to a large population base and reduced our dependence on the relatively small Malaysian market, which augurs well for the future of F&N," Chief Executive Tan Nag Menage said in a statement.
In Brunei, Malaysia and Singapore, Nestle will transfer a popular sweetened condensed milk brand to F&N as well as licence F&N to produce and distribute Nestle's three other milk brands. Nestle has also agreed to divest its 25 percent stake in F&N's Malaysian subsidiary, Premier Milk Sdn Bhd, F&N said.
"The deal will increase the dairies' division annual turnover of 600 million ringgit to more than 1.5 billion ringgit and is expected to significantly enhance future contributions to the F&N group," Tan said.
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