Its a cracker of news, they're now second largest holder after Bright Dairy and together both own more than 50% of Synlait. One can draw one's own conclusions as to what the future direction is for both A2 and SML.
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I think this goes both ways and solidifies the partnership. There could be a risk of A2 choosing another dairy factory to produce infant formula. Similarly, an equal risk of SML taking all that a2 milk and producing a2 milk formula for a competitor down the track.
Will there be a merger of sorts or buy out from a2 in a few years? I would say right now that a2 can't afford to splash out $1B+ for a dairy company without hurting their cash position so it makes sense that they have no further plans at this stage to acquire any more.
http://nzx-prod-s7fsd7f98s.s3-websit...685/283836.pdf
Contract contains interesting price escalation clause. I think we can take ATM's last sentence, that they're not interested in acquiring more, with a grain of salt.