AB Foods is set to enhance its agri-food division with a substantial investment of $60 million. The renowned company, known for its ownership of Primark and its significant presence in the sugar, food, and ingredients industries, has announced its acquisition of National Milk Records (ASE:NMRP), a dairy technology firm, for a sum of £48 million ($59.7 million).
Although AB Foods (LON:ABF) is widely recognized as the parent company of the popular fashion retailer Primark, which generates almost half of its impressive £17 billion in revenue, it is important to note that AB Foods is also a prominent player in the UK’s food production sector. Moreover, the company operates one of the nation’s largest animal feed enterprises.
AB Foods unveiled its plans on Tuesday, revealing that the integration of NMR’s dairy expertise would contribute to the growth of its agriculture business. This strategic move would provide valuable data and technology platforms to support farmers in maximizing profitability, initially within the United Kingdom.
Jose Nobre, the head of AB Foods’ AB Agri unit, expressed his enthusiasm, emphasizing the immense value that NMR brings to the dairy industry. Nobre stated, “NMR is a high-quality business which is extremely complementary and additive to our dairy strategy and offering.”
The board of NMR has wholeheartedly recommended ABF’s cash offer of 215 pence per share, a proposal that AB Foods proudly disclosed had already garnered the support of investors holding approximately 69% of the company’s shares. This level of endorsement brings the deal close to the required 75% threshold for approval.
The completion of this agreement is anticipated to take place in the third quarter, providing both AB Foods and NMR with an opportunity to collaborate and unlock their shared potential.
(Note: The conversion rate used is $1 = 0.8035 pounds)