After more than half a year’s evaluation, fisiland finally decided to keep the milk powder of Meisu Jiaer. In a statement released this morning, Hein Schumacher, chief executive officer of Royal Netherlands fisland (hereinafter referred to as “fisland”), announced the results of the strategic review of Metso baby nutrition and said that it “remains an important part of fisland’s business portfolio”.
At the same time, the Dutch dairy company also revealed the future key work of Massey Kerr, and said that it had taken China and other circles as its core markets. Let’s take a look at the latest situation.
Fisiland referred to Metso Kerr in a statement on the sale of part of its business. According to today’s statement, fislan announced on December 14, 2021 that it would conduct a strategic review of the Metso baby nutrition. According to the review results, Mercure Kerr will continue to provide important added value for the entire Philippine business portfolio, and (paying more attention to it) will help to achieve the best growth. To this end, fislan said that the geographical focus of the business will be on several core markets: China, Greece, Malaysia, Mexico and Vietnam. In addition, the professional nutrition business group will pay full attention to the brand, innovation and further digitalization in the high-end field.
This means that after more than half a year of evaluation, and the news of bidding from JUNLEBAO, Mengniu and other Chinese milk powder manufacturers continued to come out during the process, fislan finally did not plan to sell maxu Jiaer, and also had a more determined idea on how to do a good job in this business in the future.
When announcing the strategic review in December last year, simahan said that fisiland was seeking strategic cooperation for the infant nutrition business of Maxwellian with a view to seizing growth opportunities. The key markets of infant formula milk powder in the world, especially in China, are rapidly evolving. This strategic review aims to seize the growth opportunities and ensure the success of the business. According to the data, the “strategic review” mentioned by the consumer goods giants in recent years includes a variety of possibilities, such as selling the business as a whole or in part, or divesting it for independent development, IPO, etc. However, fislan did not disclose more details about the above strategic review.
The spokesman of its headquarters told the snack agency that this review is applicable to the global business of the Massu Kerr brand. In other words, the review will not be limited to the brand products of massukar in the Chinese market. As one of the largest brands under fislan, massugar infant formula is sold in 25 countries and regions in Europe, the Middle East, Asia (including China) and Mexico. According to Euromonitor International data, in 2020, the global market share of massugar was 3.3%, making it the seventh largest brand of formula milk powder in the world.
Although fislan kept the review process of Meisu Jia’er quite confidential, there were still news from time to time that various “players” went to bid in the market. According to a person familiar with the situation quoted by Bloomberg in March this year, a consortium composed of baring Asia, JUNLEBAO and Sequoia China was shortlisted for the bid of massukar. Potential bidders also include DCP capital, Mengniu and Yili. At that time, the valuation of the company was probably about US $2billion (about RMB 12.639 billion). A person close to the transaction once told xiaoshidai, “my judgment on this bidding is that the dairy enterprises may actually want to take this opportunity to see the practices of international competitors. In the end, it may not be possible. It depends on these fund institutions.”
By June this year, the transaction was suddenly pressed the “pause button”, which was allegedly due to valuation problems. According to Bloomberg news this month, fislan suspended the divestiture of the business after the shortlisted bidders’ bids failed to meet expectations. The agency believes that the rise in interest rates and the conflict between Russia and Ukraine have hit the sentiment of global investors. It is not only Metso Kerr, but also Li Jie, who is accused of selling the entire Mead Johnson milk powder business, who is also facing “cold” in the transaction. At that time, a person close to this transaction told xiaoshidai that he believed that there were two main reasons for the stagnation of this transaction. First, the milk powder industry is indeed facing challenges because the newborn birth rate is difficult to recover in the short term. The source also said that in the case of no willingness of industrial investors to buy, private equity investors have no synergy value, and it is difficult to reach the psychological price of the seller. At present, the business of massukar is not wrong, “the team should want to continue to do it by itself”.
In China, one of the core markets of massukar, the brand really gave a good answer last year. According to the introduction of the snack generation, in 2021, the market share of massugar in China was stabilized, while the growth of Royal massugar, which focuses on the ultra-high end, exceeded 50%. E-commerce channels and new distribution networks for offline cities have become growth breakthroughs.
Like the statement made by fislan today, massugar focuses on high-end innovation, digitalization and other work.
In February, Chen Ge, President of fislan China, disclosed that this year, Royal Mercure Kerr and Mercure Kerr will have a number of new products on the market, including children’s milk powder, infant rice flour, etc. Chen Ge also believes that one of the key factors for fisland to achieve sustainable growth in China in the future is to adhere to and strengthen the digital strategy. Previously, the company launched a digital tool called “Philippine Changgou” to help promote the sinking of infant milk powder channel.
Although it has decided to retain Metso Kerr, the Dutch dairy giant is still adjusting its business portfolio to better cope with uncertainties such as the outbreak. Today, fisland announced that it would sell part of its German consumer goods business to the multinational food enterprise unternehmensgruppe theo Mller. The sale targets include landliebe and tuffi brands, as well as three production facilities. After checking the official website of fesiland, the snack generation noticed that the two brands to be sold mainly sell all kinds of dairy products. Among them, landliebe products include milk, yogurt, cheese, dessert, etc., covering the markets of Germany, Austria, Hungary and Poland. Tuffi is described as “one of the largest dairy brands in Germany”, selling milk, milk drinks, cheese, cream and other products.
Commenting on the sale, sybren attema, chairman of fisland, said in a statement that this step created value for all members, and the membership of the German Cooperative remained unchanged. The decision of the German competition authority on the proposed transaction is expected to be made later this year. In fact, the decision to sell part of the consumer goods business is the latest move by fisland to accelerate its transformation. Xiaoshidai introduced that in 2020, the company announced that it was necessary to speed up a strategy named “our purpose, our plan” formulated in 2018 due to the direct and indirect impact of the global COVID-19, that is, to pay more attention to growth categories and reduce costs structurally. Fislan said that the key points of the strategy are to optimize the organization to reduce costs, mainly including optimizing the production network, management levels, support services and functions. In addition, it is necessary to further simplify the investment portfolio, strengthen the company’s net asset value, and so on.