Karachi, July 4th, 2016: Engro Corporation Limited (ECorp) is pleased to announce that it has entered into an agreement with FrieslandCampina Pakistan Holdings B.V., a wholly owned subsidiary of Royal FrieslandCampina N.V. (FrieslandCampina), for the sale of up to 51 percent of the Company’s shareholding in Engro Foods Limited (EFoods). Under the new structure ECorp will remain a significant partner and shareholder.
FrieslandCampina is one of the world’s largest dairy companies owned 100% by Zuivelcoöperatie FrieslandCampina with about 19,000 member farmers, with annual revenues of more than EUR 11billion. FrieslandCampina provides millions of customers with dairy products worldwide through its expansive global footprint with activities in over 32 countries and exports to over 100 countries. FrieslandCampina’s global brands cater to a wide spectrum of consumers across a number of categories including dairy based beverages, infant nutrition, yoghurt, desserts, butter and cheese. Some of its best known brands include Friso, Dutch Lady and Rainbow.
“This is a defining moment for Pakistan,” commented Hussain Dawood, Chairman of Engro Corporation. “This partnership enables us to provide a wider array of affordable high quality dairy products for a healthier Pakistan, especially for its younger population. Improving the wellbeing of millions of our farmers is a cause that our group has been focused on for the past five decades. Working with RFC, a company owned by farmers, will help us to accelerate our work on improving productivity in the dairy sector. I am convinced that this partnership will create tremendous long term value for our shareholders”.
With a spectacular track record of success spanning over a decade, EFoods has played pivotal role in offering Pakistani consumers hygienic and affordable solution in the drinking milk and specialized tea creamer segment through its flagship brands Olper’s and Tarang.
Babur Sultan, CEO of Engro Foods: “These are exciting times for EFoods. The synergies that will result from the combination of EFoods’ strong presence across the dairy value chain and FrieslandCampina’s global strength in innovation and R&D, operational excellence and rich product portfolio in value added dairy segment will propel our growth forward. Pakistan’s growing consumer market is well poised for new innovations and consumer offerings across the dairy sector and this partnership is set to capitalize on this opportunity. Moreover, the similarities in our core values and company culture will help us in achieving our strategic direction, at an accelerated pace.”
Roelof Joosten, CEO Royal FrieslandCampina N.V. said: “The cooperation with Engro Foods will accelerate FrieslandCampina’s route2020 strategy. Through this well organized and highly successful company we will obtain a significant presence in the Pakistani dairy market in which a growing middle class is buying more processed milk. Engro Foods offers us a basis on which we can build further. This acquisition will contribute to the value creation for our member farmers. Also we look
forward to contribute to Pakistan’s agricultural sector through knowledge transfer based on our established dairy development programme.”
The execution of this transaction, subject to approval of competition and other relevant authorities, will result in the single largest private sector Foreign Direct Investment (FDI) in Pakistan in recent years. We believe this transaction will be instrumental in positioning Pakistan as an attractive investment destination for global companies and encourage others to follow.
Evercore Partners International LLP and RJ Fleming & Co. advised Engro Corporation with respect to the transaction.