a2 Milk has made an offer to acquire 75% interest in Mataura Valley Milk for $270m as part of its long-term strategy to participate in infant formula (IF) manufacturing.
UBS reckons in the long-term, this will provide a2 Milk with manufacturing diversification and protection against potential China regulatory shift requiring integrated manufacturing.
UBS reiterates a Buy rating with a target price of NZ$22.70.
Sector: Food, Beverage & Tobacco.
Current Price is $18.37. Target price not assessed.