Thank you I did not realise that. I did a basic search and it came forward that the business was from Shanghai. On knowing this how do you feel ATM should proceed from here as both are state owned and you agreed that SML may have pissed off ATM?
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Your opinion is valued and people sharing their thoughts is totally the right approach to getting a greater understanding of anything for anyone 😊
I respect what you are saying in regards to China and state owned enterprises, and I actually fully agree with you in placing weight on their involvement Â…however their political system is layered, do you understand who owns Bright?
The company is owned (some would say fronted would be more accurate) by the Shanghai Municipal Government, behind which stands the Shanghai Investment Group…it is the second largest China food and beverage manufacturing (that is a very important word to note) company based in China…It may stand behind a number of layers but (some would say) Bright is very much China ruling party “owned”
The Animal Husbandry Group and Bright are not competitors, and it is no coincidence that these companies take blocking stakes in many businesses, alongside getting board members in place, alongside getting their banks in place, all designed to secure the manufacturing assets, and production capabilities of said companies.
These state owned entities work together and their strategic view is long term.
MVM actually needs the IP Synlait have, it is way to simplistic to say that MVM can take up capacity of Synlait production as many seem to think, and very time consuming and expensiveÂ…it is far more probable that the time is now right for Bright to move on Synlaits assets, and then transfer all the knowledge and IP required to MVM. Bright and AHG would then control the raw material supply and manufacturing assets and the channel to market (registration to sell) required to provide them what they want, no disrespect to A2 but they are along for the ride, they have an amazing brand and product but China controls this business.
Since the impact of Covid there has been so much made of the poor management of A2, and the lawsuits are underwayÂ…but if we can be balanced about it the honest truth is the management at A2 weÂ’re not asleep and neither are they stupid people, they simply over the years took credit for something that they hadnÂ’t done ( the huge profit and stellar rise of their brand)
A2 is going to be totally fine, they are going to stay in their lane and do exactly what they are being asked to do, drive the price of Synlait down (legally) and spend some money picking up the assets Bright wants ( avoids laws of foreign ownership if itÂ’s a JV with a resident company)
Everything will just continue as normal, (except most Synlait retail shareholders are going to get a haircut)
This story also takes off again SAMR enforce regulation on a2 milk practices. A2 are in a good place with close(soon to be closer) ties to relevant authorities.
It is currently of benefit to a2 to have as many participants as possible looking to break into the category, as it increase awareness and as they are the “pioneer” conversion tends to be higher. Also, legacy formula producers are marketing legacy milk with “a2”included. Which is not wrong, hence why regulation is needed.
More likely a liquidation and clean acquisition of the assets
Hard to say - I assume that the strategic goals of the Peoples Republic of China are not correlated with A2M's strategic goals - and I assume that A2M's interests feature very low on Chinas strategic priority list.
If A2M do have contacts in China whom they can trust (i.e. having a several decades long trustful working relationship) ... then they might have a quiet meeting with them to find out how they can best serve Chinas interests and benefit as well. Not sure though, A2M does have such contacts in China ... but hey, lets hope I am wrong.