FrieslandCampina is seeking to acquire a 51% stake in Pakistan's leading dairy group Engro Foods from its parent Engro Corporation for around $500m.
The acquisition would help the Dutch firm access a market where consumers mostly depend on raw milk. The cost of the deal of is based on its present stock value.
Engro Foods chief executive officer Babar Sultan was quoted by Irishexaminer as saying only 9% of milk currently sold in Pakistan is processed, but this is expected to grow to 15% over the next five years.
The 51% stake would translate to about 391 million shares and due diligence may begin shortly.
Engro Corp owns more than 87% in its wholly owned Pakistan unit.
Citigroup Global Markets in London, UK, is serving as the financial adviser for the acquisition.
Friesland detailed its Asian plans in its accounts last year, which was published this week.
The company had seen net earnings of €343m, and a 7.8% increase in sales volume, which negated the impacts of a tough period in international dairy markets.
The firm had seen strong growth in China, Indonesia, Thailand, Middle East and Africa, and South East Europe.
