LANDMARK BRIGHT DAIRY
OPENS DOORS FOR RABO
ACT
In July of this year, Rabobank advised China's Bright Dairy on its purchase
of a majority stake in New Zealand-based Synlait Milk for NZD 82 million.
Rabobank used strong cross-border cooperation to spot the sell-side
opportunity in New Zealand and offer the deal to Bright Dairy in mainland
China. Rabobank acted as exclusive financial advisor to Bright Dairy, in what
was a landmark deal.
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In addition to being Rabobank's first M&A
transaction in New Zealand and the first
cross-border M&A deal for Rabobank
Australia, the deal was also the bank's
first advisory mandate for a mainland
China company and its first out-bound
M&A transaction in China. The transaction
also marked the largest out-bound M&A
transaction by a Chinese dairy company
and Bright Dairy's first cross-border M&A
transaction. Even more importantly,
Rabobank brought together two clients
whose strategies are closely aligned.
So closely aligned, in fact, that despite
Bright Dairy coming to the table very
late, Rabobank was able to convince the
vendors to extend the bid period and
helped Bright Dairy to acquire the Synlait
stake ahead of competing bidders.
Rabobank has been working with Bright
Dairy since 2004, says Orlando Wang,
General Manager Rabobank China and
SRB for this cliënt. Consequently, when
Rabobank Hong Kong and Rabobank
Australia identified and matched Bright
Dairy's strategie goals with the oppor
tunity to acquire a stake in Synlait,
the bank was able to bring the two
companies together at the eleventh
hour. "Because of this cliënt intimacy
we knew exactly what they wanted.
The investment in Synlait Milk allows
Bright Dairy to source high quality milk
powder products from New Zealand
to supplement domestic sourcing.
And Bright Dairy's dominant presence
in China boosts Synlait's value-added
export strategy for this growing market.
Our cliënt knowledge on both sides
of the deal was a big edge in a very
competitive market."
According to Ronil Sujan, Managing
Director and Head of M&A Asia-
Pacific, it was a unique transaction for
the Rabobank franchise. 'This is an
outstanding example of cross-border
cooperation, of how we spotted the
sell-side in New Zealand and then took
the deal to Bright Dairy. This was a real
combined effort between the M&A
teams in China and Australia."
Rabobank's Food Agribusiness Research
and Advisory (FAR) unit also played an
important role in cementing the deal.
Hayley Moynihan, senior FAR analyst
in New Zealand, provided a keen
understanding of local dynamics of the
New Zealand dairy sector and was able
to forecast key drivers for this business.
"She was involved throughout the deal
process and her help was invaluable,"
Orlando Wang says. In fact, it was FAR's
in-depth knowledge of the sector that
enabled Rabobank to match Bright Dairy
with Synlait. The Chinese company,
which is not based in a dairy-rich zone,
needs a reliable supply of quality milk
products. Amir Colombo, Fiead of M&A
Australia New Zealand: "What Bright
particularly liked about this transaction
was Synlait's plans to use the investment
to build a dedicated infant formula plant
that will produce canned formula. This
means that the formula will arrivé in
China in an untampered state, which is
very important given recent issues with
formula in the country. This will be a
pristine, clean source of formula they can
market as a premium product."
Leveraging the industry expertise of FAR
New Zealand enabled Bright Dairy to
build up significant industry knowledge,
and a deep understanding of the Synlait
business quickly, which helped bring
