The Foreign Investment Review Board (FIRB) has given the green light for the $1.5 billion takeover of Bellamy’s by China Mengniu Dairy Company. But the board has laid down a number of conditions. The infant formula maker will remain headquartered in Australia for a decade and must be run by a majority Australian board.
Treasurer Josh Frydenberg backed the the FIRB’s view that the acquisition is not contrary to Australia’s national interest, but imposed conditions including that majority of the Bellamy’s board of directors will have to be Australian resident citizens.
The Treasurer also requires the Chinese buyer to invest at least $12 million in infant milk formula processing facilities in Victoria.
“The conditional approval demonstrates our foreign investment rules can facilitate such an acquisition while giving assurance to the community that decisions are being made in a way which ensures that Australia’s national interest is protected,” Frydenberg said in a statement on Friday.
The Bellamy’s board is recommending shareholders vote in favour of the proposal.
The infant formula maker is still waiting on backing from China’s State Administration for Market Regulations to sell organic formula in stores.