Timothy
Nelson Gahadza
DAIRIBORD Holdings Limited says the planned merger with Dendairy (Private) Limited has been terminated after both parties agreed to continue operating as separate entities.
The merger between the two-largest dairy companies has been on the cards for over a year after the deal was first mooted in July 2020.
“Shareholders are referred to the cautionary announcement first published on July 1, 2020 and are advised that the conclusion of the discussions indicates that it is in the interest of both parties to discontinue the process and remain as separate entities,” Dairibord said.
The dairy processor added that the contents of the cautionary had ceased to have any effect on the company, and accordingly, the caution was no longer required to be exercised when dealing in the company’s shares.
The proposed deal was subject to approval by the Competition and Tariff Commission (CTC) of Zimbabwe.
Dairibord, a Zimbabwe Stock Exchange listed entity, is the country’s largest dairy company, producing and marketing a range of fresh milk and ready to drink and long-life milk products.
It owns Lyons, which manufactures and markets ice-cream, cordials, condiments and spreads, tea and mineral water, ME Charhons which makes biscuits and baking products and controls Dairibord Malawi.
Dairibord accounts for 38 percent of the national milk intake and the merger with Dendairy would have extended its domestic market share.
In the five months period to May 2021, Dairibord, reported a strong business position after benefiting from supply and demand opportunities which resulted in a 49 percent rise in sales volume.
Liquid milks grew 18 percent constrained by milk supply challenges. Foods and beverages stood at 45 percent and 78 percent respectively.
Revenue increased by 463 percent compared to the same period last year. Operating profit margin stood at 7 percent compared to 5 percent in prior year.
Dendairy was founded in 2004 and is majority-owned by the Coetzee family, while Spear Capital, a Scandinavian private-equity firm, holds 27 percent of the business, which it acquired in 2015.
The company’s branded product range includes milk, butter, ice cream, yogurt, juices and shakes.
Bongani Ndlovu