Wilmar International increases stake in Goodman

Wilmar International has increased its stake in Goodman Fielder, a bread and dairy manufacturer in Australia and New Zealand, from 5% to 10.1% and is currently evaluating the option to further increase its shareholding.

The Singapore-based agribusiness company paid A$115m ($124m) to acquire the stake in Goodman, which is valued at $1.3bn.

According to Wilmar, Goodman’s baking, dairy, and oils brands are complementary to its consumer pack business in Asia as well as it’s Sucrogen business, which it acquired from Australia’s CSR for A$1.75bn ($1.87bn) in 2011.

Wilmar, which saw a 24% jump in its third-quarter profit, has been diversifying its operations to focus less on China’s edible oil market, where it has established itself with a 50% share.

To increase the stake in Goodman Fielder to more than 15%, the Singapore-listed company would however require clearance from the Australian government.

The latest deal comes at a time when Goodman is struggling to cope with rising costs of commodity ingredients. The company reported a 77% decline in its first-half profits and announced its plans to save A$100m ($106.98m) in costs by 2015, mostly by shedding jobs.

Wilmar has recently also been in discussions to acquire Goodman’s non-core Integro fats and oils division worth A$240m ($256.76m, which is up for sale.

Goodman, now owned by Rank Group, has received a number of bids over the past ten years, including an offer from Bain and Pacific Equity Partners, whose 2001 bid was turned down by the company’s board.