UK – Associated British Foods (ABF), a British multinational food processing, plans to buy local dairy technology firm National Milk Records (NMR) in a deal worth £48m (US$59.6m) to boost AB Agri, its agri-food unit.
In an announcement to the London Stock Exchange, Kingsmill bread and Patak’s sauces owner said “AB Agri actively looks to add new, complementary capabilities through M&A and has a track record of successfully acquiring businesses” adding that AB Agri works with more than 2,000 UK dairy farms.
Associated British Foods is a diversified international food, ingredients, and retail group headquartered in London, England.
Its ingredients division is the world’s second-largest producer of both sugar and baker’s yeast and a major producer of other ingredients including emulsifiers, enzymes, and lactose.
ABF’s subsidiary AB Agri on the other hand manufactures animal feed, creates nutrition and technology-based products, and offers our customers’ data services for the agri-food industry.
According to ABF, NMR’s business is well aligned with AB Agri’s objective of supporting customers across the dairy industry, helping to drive efficiency and increase productivity.
AB Foods has agreed to pay 215p a share for National Milk Records, with backing for the deal already from investors holding around 69% of shares, which is close to the 75% threshold needed to approve the deal.
With operations across 80 countries, AB Agri supplies animal feed, supplements, and specialist ingredients, as well as services and expertise to farmers, feed and food manufacturers, and retailers. The company employs more than 3,00 staff.
José Nobre, chief executive of AB Agri, said: “NMR is a high-quality business that is extremely complementary and additive to our dairy strategy and offering to the dairy industry.
He added that AB Agri has supported dairy farmers for more than 30 years with nutrition and specialty feed products, and more recently with data and technology platforms that deliver insights that create continuous improvement in agricultural supply chains.
“Acquiring NMR is an extension of this strategy and will enable us to service the industry better, offering products that deliver increased value, efficiency, and ultimately profitability for dairy farmers.”
In April, ABF, which also has ingredients and fuel arms and owns the retailer Primark, suggested it is winding down efforts to secure price increases on its grocery products.
Releasing its half-year results, the Ryvita crackers and Jordans cereal brands owner said it had recovered the costs linked to inflation in its supply chain, although margin recovery had not been achieved.
According to the report, grocery division revenues were up 16% year-on-year at £2.10bn. Operating profit was down marginally (1%) at £173m, but the decline was less steep than for the group as a whole, which fell 7%.