Beingmate Baby & Child Food Co shares have halved in value on the Shenzen stock exchange over the past three weeks, pushing their price 12 per cent below what Fonterra paid for its 18.8 per cent stake in the Chinese infant formula maker.
Beingmate shares closed at 15.82 yuan yesterday, below the 18 yuan apiece, or 3.46 billion yuan that the Auckland-based dairy cooperative paid for 192.4 million shares in March. The shares have halved from a record 30.95 yuan on the Shenzhen exchange in mid-June as the tech-heavy Chinese stock exchange abruptly pulled back after surging 100 per cent since the start of the year.
Read also:
• Shift to e-commerce hits firms in China
• Fran O'Sullivan: Plan to can middle-men milking parents
Fonterra and Beingmate announced their global partnership last August to help meet China's growing demand for infant formula and increase export volumes of Fonterra's Annum infant formula brand. At the time, the world's largest dairy exporter had been hoping for a 20 per cent stake in the company, and flagged it would cost around $615 million.
Last month, Fonterra sold its third dim sum bond, raising 1 billion yuan, or $230 million, with the proceeds helping fund the stake in Beingmate.