Dutch company to buy Engro Foods for around $460 million

Published: March 3, 2016
FrieslandCampina International Holding BV intends to acquire a 51 per cent stake of Engro Foods Limited. PHOTO: BLOOMBERG

FrieslandCampina International Holding BV intends to acquire a 51 per cent stake of Engro Foods Limited. PHOTO: BLOOMBERG

KARACHI: A Dutch dairy cooperative is set to buy out a Pakistani food giant with an investment of around $460 million, in what would amount to the largest private sector takeover by a foreign firm in the country’s history.

FrieslandCampina International Holding BV intends to acquire a 51 per cent stake of Engro Foods Limited, one of the largest listed companies at the benchmark Pakistan Stock Exchange (PSX), a notification on the bourse’s website said Thursday.

The deal would bring in a minimum investment of $460 million based on the Pakistani firm’s present stock value.

Engro Foods’ 2015 profit up 256%

“Yes, it is the largest ever deal in the private sector,” analyst Faisal Shaji, head of research at Standard Capital Securities, said.

Citibank Pakistan is the financial advisor.

Shahji added the deal would be closely watched by international investors eyeing the emerging South Asian economy.

“Pakistan is already in the radar range of the world corporate sector and this deal further lifts its image outside,” he said.

If finalised the Dutch takeover would boost Pakistan’s foreign direct investment statistics.

FDI was down by 57 per cent to $336 million in Pakistan for the first seven months of the current financial year compared to the corresponding period in the last financial year ending June 2015.

Pakistan expects its economy to grow by 4.5 percent for the 2015-16 financial year due to lower oil prices, planned improvements in the energy supply, investment related to the China Pakistan Economic Corridor (CPEC), buoyant construction activity, and acceleration of credit growth.

Reader Comments (9)

  • Mansoor
    Mar 3, 2016 - 6:14PM

    Doesn’t make sense to sell a growing business at this point in time. With very low family planning penetration and a fast growing population in the country their business can only grow.Recommend

  • Syedpk
    Mar 3, 2016 - 6:20PM

    Noooo, Why are our companies not expanding themselves ? Why are they choosing instead to cash out ! Thats why we dont see any Tata, Telenor, Etisalat or Nestle coming out of Pakistan.Recommend

  • Nasir
    Mar 3, 2016 - 7:45PM

    FrieslandCampina is known for its technological advances in dairy production. Something good for Pakistani industry and consumers.Recommend

  • Parvez
    Mar 3, 2016 - 11:04PM

    Good for Engro…but is it good for Pakistan ?….a one time injection of funds to a lifetime of outflow of funds. Recommend

  • Jamal
    Mar 3, 2016 - 11:28PM

    The new buyers will eventually delist the company from stock exchange and take all profit back home. Recommend

  • Khan
    Mar 4, 2016 - 10:16AM

    They’re buying 51%, the other 49% will remain Pakistani. The Dutch are extremely advanced in their agricultural sector, so we can really use their knowledge. It might inspire Pakistans agricultural industry to improve their standards. Competition is good for the economy and consumer.Recommend

  • Zaheer
    Mar 4, 2016 - 11:36AM

    Good for healthy competition and promote profitable dairy sector.Recommend

  • tariq khan
    Mar 4, 2016 - 4:10PM

    Company is valued at 150 million as per latest market cap and acquirers operating profits are less than a billion $ why in heavens name would they pay $460 million for EF don’t make any sense looks like a ponzi scheme.

  • Nasir Ch
    May 15, 2016 - 9:49PM

    Good for healthy competition and promote profitable dairy sectorRecommend

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