While many Mexican companies were suffering over the past year, the country's largest dairy company, Grupo Lala, took the opportunity of falling asset prices to go on a buying spree north of the border. The Coahuila-based dairy splashed out on three US dairy companies, Promised Land Dairy, Farmland Dairies and National Dairy. The most significant purchase, Dallas-based National Dairy, was bought for a reported US$435mn from its former parent company, co-operative Dairy Farmers of America. National Dairy gives Lala control of 18 dairy-processing facilities in the US as well as number of well known regional brands. The acquisitions followed the purchase of Nebraska-based Wells Dairy in 2008. The acquisitions make Lala the second largest dairy company in the US and the fifth biggest in the world. BMI believe the purchases will prove to be astute moves. Buying at a time when dairy prices were crashing and dairies across the country were losing money, the purchases came cheap relative to what they would have cost a year or more earlier. BMI believe Lala will now be in an excellent position to benefit from the expected continuing recovery in the world dairy market in coming years.
Thursday, May 6, 2010