Japfa buys remaining 15% of Myanmar business for US$5.7m

MAINBOARD-LISTED agri-food company Japfa on Monday said it has acquired the remaining 15 per cent of Japfa Comfeed Myanmar (JCMA) for US$5.7 million, making JCMA a wholly-owned subsidiary of the group.

The acquisition is made via a conditional share purchase agreement (SPA) between Japfa's wholly-owned subsidiary Japfa Myanmar JV - which currently holds 85 per cent of JCMA - and Best Livestock Limited, an unrelated third party, for the remaining 15 per cent of the issued share capital of JCMA.

The US$5.7 million consideration was arrived at on a willing-buyer, willing-seller basis, said Japfa. A refundable deposit of US$1.0 million will be paid around Feb 2, and the remaining US$4.7 million will be paid upon completion of the SPA, after all conditions precedent have been satisfied, the primary condition being the approval of the Myanmar Investment Commission.

JCMA, which runs a vertically integrated poultry business ranging from feedmills, poultry breeding farms and hatcheries, to commercial and contract farms, had net assets of US$19.5 million as at Sept 30, 2014, according to Japfa.

"A change in the Myanmar regulations has created an opportunity for the group to fully own its Myanmar operations and reap the full benefits of this fast-growing poultry market. By replicating our Indonesian poultry business model, we now enjoy a first-mover advantage and hold a leading market position for poultry in Myanmar," said Tan Yong Nang, chief executive officer of Japfa.