Blackmores – the latest to fall to foreign takeover

By Peter Roberts

Sydney vitamin manufacturer Blackmores has fallen victim to foreign takeover and will be removed from listing on the ASX.

Japanese company Kirin Holdings, best known as a beer and beverage group, is to buy the company in a takeover valuing the business at $1.8 billion.

The friendly takeover by the member of the Mitsubishi keiretsu follows a shareholder vote and decision by Federal Court of Australia announced today approving the sale.

Blackmores shareholders will receive $91.71 cash for each share they hold, plus receive a special dividend of $3.29 in consideration for each Blackmores share.

This represents a value 30.5 percent above the weighted average sale price of the company’s shares when the takeover bid first became public in April.

Directors and an independent expert recommended the company be sold in the absence of a superior offer – which did not eventuate.

The company is one of Australia’s most successful consumer brands and is recognised for its quality and integrity throughout Asia and China.

Widely available throughout the region, as well as through e-commerce channels, Blackmores occupies the top end of the market for what might be called luxury vitamin products.

It seems to be the fate of Australian businesses to grow to a level of prominence internationally, only to be taken over by a bigger company with deeper pockets – and more loyal shareholders – than those in Australia.

This includes the son of the founder in this case – current shareholder Marcus Blackmore’s father Maurice established the business in Brisbane in 1932 on naturopathic principles.

Chair of Blackmores Wendy Stops told a shareholder meeting this week: “Blackmores is now an international and diverse business with a trusted brand and reputation synonymous with quality, assurance and efficacy with natural health products that deliver choice to consumers in how they may live healthier lives.”

Massive companies like Kirin and Mitsubishi are in it for the long haul – Kirin was founded in 1870 and has survived societal upheaval and devastating war.

Blackmores shareholders – and by extension the Australian capital markets – have succumbed to an attractive price at a period when the currency is at a historical low and Australian manufacturing assets cheap.

For comparison, Blackmores were were selling for around $200 back in 2016 on the back of success in the China market.

Since then Marcus Blackmore has been at odds with the board, even voting against the remuneration of executives and directors.

But Australia is left with a few crumbs from this latest consumer brand to go offshore to shareholders who better understand the long-term value of innovation, branding and manufacturing.

As Ms Stops said: “The proposal from Kirin recognises this journey in establishing the strong leadership position that Blackmores has established in the natural health sector across Asia Pacific region and also the significant opportunity that lies ahead as part of Kirin’s health science business across the world.”

Opportunities that will accrue to foreign shareholders yet again.

Picture: Marcus Blackmore