ICI Pakistan to divest partial stake of NutriCo Morinaga for $45mn

ICI Pakistan Limited has entered into and executed a share purchase agreement (SPA) to divest 26.5% of the issued and paid-up share capital of its subsidiary NutriCo Morinaga (Private) Limited (NMPL) to Morinaga Milk Industry Co. Ltd, a Japanese dairy giant, at an aggregate sale price of $45.08 million, which translates into approximately $2.07 per share.

In a notice sent to the Pakistan Stock Exchange (PSX) on Friday, ICI Pakistan said that it would continue to hold approximately 24.5% of the issued and paid up share capital of NMPL upon sale of the above referred shares.

“Additionally, in terms of the SPA, approximately 6.8% of the shares of NMPL are to be sold to Morinaga Milk by other shareholders of NMPL (who shall also continue to remain shareholders of NMPL upon such sale).

ICI Pakistan to partially divest share capital of NutriCo Morinaga for $45.08mn

Following closing of the transaction, Morinaga Milk will hold 51% of the issued and paid up share capital of NMPL,” the statement read.

ICI Pakistan said it has also entered into an agreement with the shareholders of NMPL, which shall be effective from closing of the share purchase transaction.

Back in July, Morinaga Milk Industry sent a conditional offer to ICI Pakistan to acquire an aggregate of approximately 33.3% of the issued and paid-up share capital of NMPL from NMPL's existing shareholders, including ICI Pakistan.

The acquisition was set at an aggregate price of $56.6 million, which translates to approximately $2.07/- per share, ICI Pakistan had said at the time.

NMPL is a joint venture between ICI Pakistan, Morinaga Milk and Unibrands (Private) Limited to locally manufacture and distribute nutritional formula products, and was recently merged with NutriCo Pakistan (Private) Limited, which was involved in the import and distribution of select products of Morinaga Milk.

Moringa Milk Industry, in its filing to the Tokyo Stock Exchange in July, said that the company has been exporting infant and toddler milk to Pakistan since 1978 and sees the South Asian country as an attractive market, with the fifth-largest population in the world and continuing population growth forecast.

Commercial operation of NutriCo Morinaga begins

“The Morinaga Milk Industry brand has gained broad recognition in Pakistan over many years through the export business, giving the Company a high chance of achieving further rapid growth in the Pakistan market.

“By acquiring management control over NutriCo Morinaga ... the company considers that it will be able to capture growth opportunities, leading to the further development of the Morinaga Milk Industry brand infant and toddler milk business in Pakistan and contributing to the growth and health of the consumers of the Company products,” it said.