So not sure A2M need almost $1 billion in cash for M & A anymore...

So not sure A2M need almost $1 billion in cash for M & A anymore with this outcome unless they have other plans - especially the last point of 'Synlait making available to a2MC an additional slot at Dunsandel for a potential new China Label registered product' .... I will be interested in the feedback at next week's financial presentation. Is a special dividend or share buy back on the cards ?


GLTAH


Settlement of various matters in dispute

The a2 Milk Company Limited (a2MC, the Company) is pleased to confirm that it has conditionally resolved the various disputes subject to arbitration with Synlait Milk Limited (Synlait), including the exclusivity dispute, pricing disputes, and various other disputes.

Key points which arise from the settlement of the disputes are:

• Synlait accepts the validity of a2MC’s notice dated 15 September 2023 cancelling the exclusive manufacturing and supply rights enjoyed by Synlait in respect of stages 1 to 3 of a2MC’s current infant milk formula (IMF) products (being a2 Platinum® and a2 至初® for sale by a2MC in the markets of China, Australia and New Zealand. Synlait’s manufacturing and supply exclusivity ceases from 1 January 2025.

• a2MC owns the intellectual property rights for the Product Specifications of the IMF products and is free from any restrictions or obligations under the Nutritional Products Manufacturing and Supply Agreement (NPMSA) to source any Products from any person including Synlait, third party suppliers or internally.

• Synlait’s obligation to procure the supply of a minimum annual volume of product, and certain priority arrangements in favour of a2MC, will continue to apply.

• The cancellation relates only to the exclusivity arrangements. The NPMSA remains in place but may be terminated by either party on three years' notice (with a further one year transition period).

• The parties have agreed to resolve the various pricing and other disputes between them with a2MC to make a one-off payment to Synlait of NZ$24.75 million. This payment largely comprises amounts that had been withheld in accordance with the terms of the NPMSA from payment pending resolution of matters in dispute. Pricing on certain existing products manufactured by Synlait will increase incrementally and Synlait will benefit from improved purchase order deposit payment terms.

• The parties have agreed that a2MC’s US IMF products are to be supplied under the terms of the NPMSA, with a2MC contributing to certain Synlait development and FDA registration costs.

• Synlait continues to hold the Chinese regulatory State Administration for Market Regulation (SAMR) registration which is attached to Synlait's Dunsandel manufacturing facilities. The registration is for a2MC’s Chinese labelled a2 至初® Infant Formula (stages one, two and three), and it is expected that Synlait will continue to manufacture those products destined for the China market for a2MC for the period of that registration (currently expiring September 2027).

• Synlait will make available to a2MC an additional slot at Dunsandel for a potential new China Label registered product – a2MC and Synlait will work together to develop the new product, prepare the SAMR registration dossier and seek registration from SAMR by December 2029.