Tuesday, 31 August 2021 12:00

Takeover rumours

Written by Milking It

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Listed New Zealand company the a2 Milk Company - once a darling of the stock exchange - is the subject of takeover rumours.

Australian media reports that the world's largest dairy company Nestlé is eyeing the underfire manufacturer of A2-protein milk.

a2 Milk's market capitalisation had fallen from $16.1 billion to $4.7b over the past year. As the pandemic distrupted sales of its infant formula to Chinese consumers through the daigou channel, falling infant births in China and excess supply of its products also curbed consumer demand. The company had struggled to get on top of these challenges which resulting in it downgrading its earnings guidance four times in nine months.

The takeover rumour though has boosted the share price.

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