Tasmanian-founded Bellamy’s Australia Limited board recommends $1.5b takeover by China Mengniu Dairy Company

A Tasmanian-founded business could be taken over by a large Chinese company in a $1.5 billion deal.

Bellamy's Organic Toddler Milk Drink.

A CHINESE dairy company looks set to take over a Tasmanian-founded infant formula company before the end of the year.

In a statement released today, board members of embattled Bellamy’s Australia Limited have unanimously recommended to shareholders the China Mengniu Dairy Company acquire the business for $1.5 billion.

Bellamy’s was founded in Launceston in 2004 and produces organic baby formula, cereals and other baby-friendly foods.

The takeover is subject to the approval of Bellamy’s shareholders and the Australian Foreign Investment Review Board, with an aim to have the process completed before the end of the year.

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Bellamy’s chair John Ho said the proposal was “an attractive all-cash transaction” at a 59 per cent above the prevailing share price.

“It reflects the strength of the Bellamy’s brand, the dedication of 160 passionate employees and the progress of our turnaround plan,” he said.

Mengniu chief executive officer Jeffrey Minfang Lu said the company would invest in the local dairy industry to further grow the company.

“Bellamy’s is a leading Australian brand with a proud Tasmanian heritage and track record of supplying high quality organic products to Australian mums and dads,” he said.

“This leading organic brand position and Bellamy’s local operation and supply-chain are critical to Mengniu.

“Our sales growth ambitions for Bellamy’s in Australia, and the broader Asia Pacific region, will see investment in the local dairy industry to ensure the required capacity is in place to achieve these plans.”

Bellamy’s chief executive officer Andrew Cohen described Mengniu as the “ideal partner.”

Bellamy's chief executive Andrew Cohen. Picture: SUPPLIED

“This transaction can further deliver on our founder’s original vision of a truly iconic Australian brand,” he said.

“Our employees, our trade partners and local organic manufacturers will continue to grow and thrive with the success of our business.”

The share price of the former favourite of Australian stock analysts has been on a rollercoaster ride over the past several years largely due to uncertainty about the Chinese market.