Dive Brief:
- The a2 Milk Co. has turned down a takeover bid from from its biggest shareholder, Freedom Foods, and bid partner Dean Foods Co. in lieu of other confidential offers.
- a2 Milk said its board did "not consider that the proposal in the expression of interest is compelling," according to Just-Food. The company added, "Accordingly the board would not be in a position to recommend it to shareholders."
- Last month, Freedom Foods announced that it and an "unnamed leading international liquid dairy milk company" had introduced "an indicative, non-binding and conditional expression of interest" in a2 Milk, Just-Food reported. Two days later, a2 Milk confirmed that Dean Foods was the other unnamed company.
Dive Insight:
a2 Milk, which currently controls about 9% of the total fresh milk grocery market in Australia, is on the rise, having recently reported an unaudited 39% increase in revenue for fiscal year 2015 over the year before.
With this type of growth, a2 milk may soon transform from a lesser-known dairy innovation to a staple on grocery store shelves. It was introduced in the U.S. in the spring and also has a foothold in China and the U.K. outside of its base operations in Australia and New Zealand. a2 milk's popularity stems from the A2 protein, which is deemed to be more natural than the A1 protein dominant in retail milk today. Also, the A1 protein is linked to the side effects many people experience from drinking milk. Consumer demand could be high for a2 milk as time goes on, just as it has been for alternative dairy products, such as almond, soy, and coconut milks.