PT Ultrajaya Milk Industry & Trading Company Tbk (ULTJ) is preparing a rights issue of up to Rp16.92 trillion to finance its planned acquisition of 100% of PT Frisian Flag Indonesia (FFI) for Rp14.56 trillion (20/09).

Around 86.01% of the rights issue proceeds, or Rp14.56 trillion, will be used to acquire all FFI shares through an inbreng mechanism, or a capital contribution in a form other than cash.

ULTJ said the acquisition is intended not only to expand its product portfolio but also to strengthen operations and optimize the company’s supply chain.

ULTJ Plans Rp14.56 Trillion Frisian Flag Acquisition

ULTJ President Director Sabana Prawira Widjaja said the company sees FFI as an asset that can complement its existing business.

The acquisition is expected to strengthen ULTJ’s operational and financial capabilities while supporting its long-term business expansion.

"The company believes that the acquisition of all FFI shares is an opportunity that can have a positive impact on the continuity of the company's business, both operationally and financially in the long term," Sabana Prawira Widjaja said in an information disclosure to the Indonesia Stock Exchange.

Acquisition to Expand ULTJ Product Portfolio

ULTJ and FFI have diverse product lines that can complement each other.

ULTJ is known for its Ultra Milk UHT products, as well as non-dairy beverages such as Teh Kotak and Sari Kacang Ijo.

FFI has a portfolio that includes sweetened condensed milk, powdered milk, UHT milk, and children’s nutrition products under the Friso brand.

ULTJ said the inclusion of FFI in its group could expand the range of products offered to the market.

ULTJ Sees Production and Supply Chain Synergies

ULTJ also sees potential synergies from the production facilities operated by both companies.

ULTJ has factories in Padalarang and Cikarang, West Java, while FFI operates facilities in Pasar Rebo, Ciracas, and Cikarang, Jakarta.

The facilities could add production capacity and provide flexibility in milk processing. However, each facility will continue to operate independently despite being part of the same group.

ULTJ also leaves room for coordination when needed, including production allocation, the use of third-party outsourcing services, and resource sharing.

The company also sees potential synergies in raw material procurement. With greater needs after the two businesses become part of the same group, ULTJ sees an opportunity to increase procurement scale and improve planning.

Rp16.92 Trillion Rights Issue to Fund Acquisition

ULTJ is preparing a rights issue of up to 7.87 billion new shares at an exercise price of Rp2,150 per share.

If all the new shares are subscribed, the funds raised will reach approximately Rp16.92 trillion.

Most of the proceeds, equal to 86.01% or Rp14.56 trillion, will be used for the acquisition of 100% of FFI.

FCIH Set to Become New ULTJ Controller

Based on ULTJ’s information disclosure to the Indonesia Stock Exchange, FFI is currently owned by FrieslandCampina International Holding B.V. (FCIH) with 78.09%, Blue Waves Group Ventures Pte. Ltd. (BWG) with 16.91%, and PT Bahtera Wiraniaga Internusa (BWI) with 5%.

The transaction will change ULTJ’s ownership structure. ULTJ’s major shareholders and founders, including Sabana Prawirawidjaja and PT Prawirawidjaja Prakarsa, have agreed to transfer their HMETD to FFI shareholders.

After the inbreng transaction is completed, FCIH will become the new controlling shareholder of ULTJ and will be required to conduct a Mandatory Tender Offer (MTO) for ULTJ shares held by the public under POJK No. 9/2018.

ULTJ management said the acquisition of FFI will expand its product portfolio and create synergies in the operations and supply chain of the dairy industry.

PHOTO: ULTRAJAYA

This article was created with AI assistance.

We make every effort to ensure the accuracy of our content, some information may be incorrect or outdated. Please let us know of any corrections at [email protected].