Australia Asia Group (02425) plans to acquire all shares in a dairy manufacturing business company
Zhitong Finance App News, Australia & Asia Group (02425) issued an announcement. On July 21, 2026, Shanghai Aoya Food Co., Ltd. (the buyer) (that is, a wholly-owned subsidiary of the Company) and Meiji (China) Investment Co., Ltd. (seller) entered into a conditional sales agreement (sale agreement). The seller has already agreed to buy all of the shares (shares to be sold) of the seller's wholly-owned subsidiary (target company) to hold the target business (including dairy products carried out by the seller through the transferred assets, transferred employees and the transfer contract) Sales business and dairy production business of target subsidiaries). Costs include a basic purchase price of RMB 320 million and an adjustment amount, but the maximum purchase price is RMB 350 million.
As a prerequisite to the acquisition, the seller must complete the restructuring before the transaction is completed, which includes: registering the target company; transferring the transferred assets, target subsidiaries and transferred employees to the target company; and transferring or renewing the transfer contract.
After the restructuring is completed before the transaction is completed, the target company will operate the target business previously operated by the seller. After the transaction is completed, the target company will become a wholly-owned subsidiary of the Company, and the target group's financial performance, assets and liabilities will be consolidated into the Group's financial statements.
The Board believes that the acquisition is a strategic opportunity for the Group to expand its business scope beyond raw milk production and strengthen its position in the entire dairy value chain. The target group's dairy manufacturing business is a natural downstream extension of the Group's raw milk production capacity. After the transaction is completed, the Group will be able to integrate its business in milk procurement, processing and sales, so that a larger proportion of its own raw milk can be processed through the target group's manufacturing facilities. It is expected that the acquisition will increase the Group's demand visibility for raw milk production, thereby reducing its dependence on third party customers in selling raw milk and mitigating the risk of fluctuating raw milk prices and cyclical market fluctuations.
The acquisition will enable the Group to acquire mature dairy manufacturing facilities, along with existing production capacity, equipment and technical expertise. Since the target group currently has some existing processing capacity and the utilization rate is relatively low, the Group plans to introduce its existing business volume after the transaction is completed to increase capacity utilization. The move is expected to dilute fixed costs, improve production efficiency, improve supply chain collaboration, and enhance overall cost competitiveness.
The acquisition will enable the Group to acquire the target group's stable customer relationships and distribution networks in China. By utilizing the target group's existing business-to-business and business-to-consumer channels, the Group expects to broaden its market coverage and strengthen its market position in a wider range of customer segments. It is anticipated that the acquisition will also diversify the Group's revenue streams, expand its customer base, and reduce the risk of customer concentration. Furthermore, a broader sales and distribution network is expected to improve the stability and resilience of the Group's revenue and cash flow situation.
The acquisition will enable the Group to take advantage of the target group's established brand awareness, customer relationships and market influence in the Chinese dairy market. The directors believe that this current market position can help retain customers and support the Group's future business expansion and market penetration after the transaction is completed.