KARACHI: ICI Pakistan Ltd said on Thursday Japan’s Morinaga Milk Industry Company Ltd wants to buy an aggregate of 33.3 per cent shares of NutriCo Morinaga, a subsidiary of the Pakistani conglomerate.

The Japanese investor wants to acquire one-third of shareholding in the local company, which is engaged in the manufacturing and trading of infant and grown-up formula, from its existing shareholders, including ICI Pakistan Ltd that controls a 51pc stake.

The aggregate offered price is $56.6 million, translating to $2.07 or Rs430.48 per share of the company.

Speaking to Dawn, Arif Habib Ltd Head of Research Tahir Abbas said the size of the transaction for ICI Pakistan is going to be Rs9.37 billion while the expected gain before tax will likely be Rs7.3bn or Rs79.14 per share.

NutriCo Morinaga was established as a joint venture between ICI Pakistan, Morinaga Milk and Unibrands Ltd to locally manufacture and distribute nutritional formula products. It was recently merged with NutriCo Pakistan Ltd, which was set up for the import and distribution of select products of Morinaga Milk.

ICI Pakistan is poised to move forward with the proposed divestment of 26.5pc of its shareholding in NutriCo Morinaga to the Japanese investor, subject to the valuation and the finalisation of definitive agreements. ICI Pakistan will continue to hold about 24.5pc of the company’s shares after the completion of the proposed transaction.

“As the owners of the Morinaga brand know-how to manufacture the products along with its superior research and development facilities, Morinaga Milk is well equipped to accelerate the growth of (NutriCo Morinaga),” the company said in a regulatory filing.

Net turnover of NutriCo Morinaga for the first nine months of 2021-22 was Rs10 billion, up eight per cent from a year ago. “The improved performance was predominantly driven by higher gross margins and higher volumes,” said the latest quarterly report of its parent company.

Published in Dawn, July 15th, 2022