SMC files protest with Australia’s Takeovers Panel

Food and beverage conglomerate San Miguel Corp. (SMC) has lodged a complaint before the Australian Takeovers Panel over the "unacceptable circumstances" in Fonterra Cooperative Group Ltd.’s A$1.91-billion bid for control of Australian dairy giant National Foods Ltd.

Through San Miguel Foods Australia Holdings Pty. Ltd., SMC claimed there has been inadequate disclosure regarding a possible joint venture among National Foods, Sodima SAS and Yoplait SAS should Fonterra acquire all of the remaining shares in National Foods.

National Foods distributes the Yoplait brand in Australia while Sodima is a Yoplait-controlled entity which is a counterparty to manufacturing and distribution agreements with National Foods.

SMC said Yoplait and Sodima "should have lodged substantial holding notices annexing a copy of, or setting out details of, each agreement or arrangement between Fonterra, Sodima and Yoplait in relation to the possible joint venture."

SMC, Southeast Asia’s biggest food and beverage company, has alleged that entering into an arrangement on a possible joint venture has made Yoplait and Sodima associates of Fonterra, a minority stockholder in National Foods.

The Takeovers Panel said it has not received submissions from other parties involved but a sitting panel would be formed to review the application.

SMC’s complaint came after Fonterra increased its bid for National Foods by 10 cents each from A$5.45 a share, topping SMC’s earlier offer. Fonterra’s new offer values National Foods at up to A$1.9 billion and would rise to A$6.20 if it acquires more than 90 percent of the Australian dairy company.

SMC’s offer currently stands at $A5.90 after National Foods declared a 10 percent interim dividend late last month.

Fonterra, which holds 19.02 percent of National Foods, said its offer was unconditional except for 50 percent minimum acceptances. The company is the world’s largest dairy products exporter. It is owned by about 12,000 farmer suppliers, most of which are members of the Dairy Farmers of New Zealand.

The management of National Foods had previously recommended to its shareholders to accept SMC’s offer in the absence of a counter proposal.

SMC already owns a number of assets in Australia, including the Berri fruit juice operations, and premium beer brewer James Boag and Son. SMC said National Foods fit the group’s strategy of expanding its presence in the beverage and food businesses in the Asia-Pacific region.

The acquisition, according to SMC, would provide access to dairy raw material and make available a wide range of products to its customers with the focus on the branded segment. National Foods would also get access to the Asian dairy market through SMC.

National Foods is one of Australia’s largest food companies, listed on the Australian Stock Exchange with leading brands such as Pura milk, Yoplait yoghurt and King Island gourmet cheese and cream.

SMC’s takeover bid represents the latest move in the conglomerate’s long-term strategy of increasing its non-alcoholic beverage and food holdings.

SMC, which is 15 percent owned by Japan’s number two brewer

Kirin Brewery Co., dominates its home market in beer, liquor, soft drinks, food and poultry products. It is also into packaging and agribusiness.

Founded in 1890, SMC has over 100 facilities in the Philippines, Vietnam, Thailand, Indonesia, Hong Kong, South China and Australia, and employs over 26,000 people in the region.