Associated British Foods to buy National Milk Records
What’s in it for Associated British Foods?Copy link to section
The food processing giant has agreed to pay £48 million ($59.7 million) in cash for National Milk Records.
AB Foods expects this acquisition to result in a boost to its agriculture-food business. In the press release, Jose Nobre – the Head of AB Agri said:
NMR is high-quality business, complementary and additive to our dairy strategy. It’ll enable us to offer products that deliver increased value, efficiency and ultimately profitability for dairy farmers.
AB Agri employs about 3,000 people across 80 countries and works with over 2,000 dairy farms in the United Kingdom. ABF ended roughly flat on Tuesday.
What’s in it for National Milk Records?Copy link to section
The deal values each NMR share at 215 pence – about an 87% premium on their previous close. AB Foods expects this transaction to close in the third quarter of 2023.
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The stock market news arrives about a month after National Milk Records reported an increase of just over 15% in its quarterly profit. According to Trevor Lloyd – Chairman of the dairy technology company:
ABF will accelerate and de-risk NMR’s ability to deliver its strategic objectives, streamlining industry processes to ensure long-term sustainability, efficiency, and profitability of U.K. dairy.
Associated British Foods plans on funding this transaction with cash on hand. It had net cash before lease liabilities of £586 million as of early March.