Arla sells its share in Vigor

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06 Nov 2017 --- Following a change in ownership of Brazilian dairy company Vigor S.A., Arla Foods has decided to divest its eight percent share in the company with immediate effect. Brazil’s leading dairy company Vigor S.A. has been sold by majority shareholder JBS S.A. to Mexican dairy company Grupo Lala S.A.B. de C.V.

In connection with this transaction, Arla Foods has sold its eight percent share in Vigor to Lala.

“Arla has operated in the Brazilian market for decades, however a co-ownership of Vigor no longer serves our strategic purpose. Our decision to divest is the best solution for Arla as we continue to focus our strategic investments on creating sustainable growth through our business in Asia, Africa, the Middle East and the USA,” says Executive Vice President in Arla Foods, Tim Ørting Jørgensen, who is responsible for Arla’s international business.

Vigor is the largest dairy company in Brazil. In 1986 Arla entered a 50/50 joint venture partnership with Vigor under the name Dan Vigor, which consisted of local cheese production under the Danubio brand. In 2014, Arla exchanged the joint ownership of Dan Vigor for an eight percent share in Vigor.

Further terms and conditions of the transaction are not disclosed. However, back in August FoodIngredientsFirst reported that the transaction is subject to certain approvals by Grupo Lala's shareholders' meeting, governmental authorizations, shareholder agreement, and other contractual conditions.

Financing for the transaction will likely include a bridge loan, followed by a combination of long-term debt and additional equity of approximately US$550 million, of which an estimated US$315 million will be committed by Lala's current shareholders.

The Lala Group’s Board of Directors agreed to propose to company shareholders the acquisition of up to 100 percent of the shares of Brazilian dairy giant, Vigor Alimentos, S.A. and the shares of Itambé Alimentos, S.A. for an implied value of R$5,725m (US$1.84bn).

FoodIngredientsFirst also reported how the Mexican-based Lala Group, was looking to seal a deal to buy control of Vigor Alimentos with a Board of Directors meeting scheduled to finalize the acquisition. You can read the full story here

It said in a statement that a proposal to acquire Vigor from investment holding company J&F Investimentos SA, as well as a borrowing plan and potential share offering, would go before the Board.

To contact our editorial team please email us at editorial@cnsmedia.com

Arla Foods Ingredients

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Arla Foods Ingredients is a global leader in natural whey ingredients for products in a range of categories – from sports nutrition, beverages, bakery, dairy and ice cream to clinical and infant nutrition. 
 
The cornerstones of our business are innovative ingredients, world-class facilities and a staff of dedicated experts. Drawing on our portfolio of functional and nutritional whey proteins, milk minerals, lactose and permeate, our expert team delivers solutions that bring new food products quickly and efficiently to market. Our application centres run hundreds of customer product trials every week. All ingredients are produced using state-of-the-art processing technology at our plant in Denmark, or by one of our joint ventures in Argentina, Germany and the UK.
 
Arla Foods Ingredients Group P/S is a 100% owned subsidiary of Arla Foods, a global dairy company and cooperative owned by dairy farmers in Denmark, Sweden, the UK, Germany, the Netherlands, Belgium and Luxemburg.

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