The new bit is the OIO has approved the buy. That take uncertainty out of the equation - and we know markets don't like uncertainty.
I don't see this as a Fonterror type situation. For a start Fonterror is a Co-op. Secondly A2M was potentially constrained by a single supplier (Synlait). This buy de-risks that relationship. It should also keep pressure on SML margins.
Clearly running manufacturing is different from running marketing. The Board just need to be very clear on making sure Mataua is run by skilled manufacturing managers. Not social justice warriors. And I hope they understand their are very few Maori in Southland so no point looking at a CEO who can speak te reo - hopefully they find one that can speak a bit of Chinese.
Anything that shores up the relationships with the Chinese is a good thing I reckon. And having CAHG as owner of the other 25% further enhances the relations ship with these within China. It may allow A2 to spread their wings further than may be restricted by Shangai Government ownership of Synliat.
A2M Price at posting:
$6.52 Sentiment: Buy Disclosure: Held
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