The purchase will give SMC a third of Australia’s A$3.5-billion dairy industry.
"We hope to complete it this month. We’re just waiting for the necessary approvals," Constantino said.
SMC’s offer is subject to certain conditions, including winning more than 50 percent of National Foods, which is about 19-percent owned by Fonterra Cooperative Ltd. and securing approvals from egulators.
Constantino said SMC will not use the entire $1.85-billion loan secured from a group of foreign lenders for the acquisition of 100 percent of National Foods.
SMC earlier said it may consider eventually disposing up to 49 percent of National Foods to give it enough elbow room for its planned acquisitions as it aims to snare more of the Asia-Pacific market. The divestment is among several options being considered by SMC to manage its financial exposure and allow it to pursue other acquisitions.
This would be the company’s biggest acquisition as it positions itself one of the top food and beverage conglomerates in the region. National Foods owns top-selling Australian consumer brands such as Pura fresh milk, King Island cheeses, Yoplait yoghurts and Fruchee dairy desserts.
SMC is widely expected to benefit from the deal amid soaring milk powder prices. The transaction will put the company on the list of leading food and beverage companies of the world.
SMC has a long-term strategy of growing its beverages and food businesses in selected countries in the Asia-Pacific region. It generally prefers to acquire businesses with a strong local management team and empower that local management team to grow the business locally and expand organically utilizing the SMC group’s knowledge of key Asian markets.
Prior to finalizing its strategy for the National Foods business, SMC will undertake a comprehensive review as to among other things, National Foods’ financial performance, long-term plans, activities, assets and market position with a view to identifying opportunities for revenue growth and other benefits and assessing its financial position.
SMC said the review of National Foods will start upon acquisition of full control of the dairy company.
The conglomerate said its purchase of National Foods would increase its exposure to the Australian dairy goods market. It already owns a number of assets in Australia, including the Berri fruit juice operations, and brewer James Boag and Son.
SMC emerged the winner in a fierce five-month bidding war for National Foods as its rival suitor, New Zealand’s Fonterra pulled out of the race.
The bidding war, which started in December last year, culminated in SMC’s offer of A$6.40 a share, up from its previous bid of A$5.90 and above Fonterra’s upgraded offer of A$6.20.