A2 Milk Co. is expanding its footprint in food manufacturing by acquiring an infant formula business in New Zealand. The company plans to invest NZ$100m ($59.3m) to enhance its factory capacity.
In a comprehensive announcement of its full-year results on August 18, A2 Milk revealed the acquisition of a Yashili New Zealand Dairy-owned plant situated in Pokeno, Waikato, alongside the divestment of its majority stake in Mataura Valley Milk.
The Pokeno facility already possesses two registrations for Chinese-label infant milk formula (IMF), strengthening A2 Milk’s established presence in this lucrative market, which significantly contributes to its annual revenue.
A2 Milk indicated in a stock exchange filing that it likely acquired Yashili New Zealand Dairy as part of this deal. This business had previously attracted investment from French dairy giant Danone, which increased its stake in 2018/19.
A spokesperson for A2 Milk confirmed this acquisition, stating that Danone is “no longer a shareholder.”
This acquisition aligns with A2 Milk’s “supply chain transformation strategy.” The filing detailed: “The acquisition of an integrated nutritional manufacturing facility with two CL IMF product registrations, located in Pokeno, New Zealand, by purchasing all of the shares in Yashili New Zealand Dairy Co. Limited, from Yashili International Group Limited (a subsidiary of China Mengniu Dairy Group Limited) for approximately $282 million on a debt and cash-free basis.”
David Bortolussi, A2 Milk’s CEO and Managing Director, remarked: “The acquisition of the Pokeno manufacturing facility and related products represents a pivotal moment for The A2 Milk Company and the execution of our supply chain transformation strategy.”
Furthermore, Bortolussi noted that the Pokeno facility and its team have contributed significantly to “co-developing and producing” A2 Milk’s English label formulas, including A2 Genesis and A2 Gentle Gold.
As A2 Milk reported significant increases in revenue and profits for the fiscal year 2025, it also disclosed the sale of its 75% stake in Mataura Valley Milk (MVM), a business it originally acquired in 2021.
Open Country Dairy, a New Zealand-based milk processor, will purchase this stake, alongside the 25% held by China Animal Husbandry Group. A2 Milk expects to generate around NZ$100m from this transaction.
However, the company anticipates incurring a loss of approximately NZ$130m from this divestment. Notably, MVM will continue to supply A2 Milk with A1 protein-free ingredients under a new supply agreement.
Bortolussi explained: “MVM is an advanced nutritional powder drying facility that continues to have significant potential but is no longer the optimal asset and pathway to achieve our strategic objectives.”
In addition, A2 Milk announced that its NZ$100m investment in the newly acquired Pokeno factory will create over 100 new jobs over time.
In terms of financial performance, A2 Milk reported a commendable 13.5% rise in sales revenue for 2025, reaching NZ$1.9bn. Notably, China and the broader Asia region contributed NZ$1.3bn, marking an increase of 13.9%.
IMF products sold in China and Asia generated NZ$1.19bn, up 12.4% from the previous year.
For the group as a whole, A2 Milk saw EBITDA increase by 17.1%, reaching NZ$274.3m, with the margin expanding by 0.4 percentage points to 14.4%.
The net profit after tax surged by 21.1% to NZ$202.9m, while basic EPS rose by 20.9% to 28 cents.
Looking ahead to 2026, A2 Milk anticipates revenue growth in the high single-digit range, with an EBITDA margin projected between 15% and 16%.
