Bright Dairy Acquires New Wright: No Stopping Period

If you want to "match" the speed of mergers and acquisitions, Bright Dairy's acquisition of New Zealand's Synlait Milk Co. (hereinafter referred to as "New Wright") can definitely be regarded as a quick hand.

At the end of May 2010, Bright Dairy participated in the new Wright bid. Two months later, the due diligence and all relevant legal documents were negotiated and signed. The two sides announced M&A matters.

In September and October of that year, Bright Dairy successively received the New Zealand Overseas Investment Office's decision notice, the National Development and Reform Commission's approval of the project, and the approval of the Shanghai Municipal Commission of Commerce.

In November 2010, Guangming Dairy officially announced that it had completed the delivery formalities for the subscription of the new shares of the new Wright project, thus completing the first overseas merger and acquisition of the Chinese dairy industry.

The speed of Bright Dairy is not without trace. Previously, the new Wright No. 1 plant was in full production due to a large number of orders, and it was urgent to build a second plant to meet the strong market demand. The intervention of Bright Dairy is precisely for the construction of No. 2 factory, which will be used as a production base for bright high-end infant milk powder. Two months after the two parties reached an equity agreement, the construction of the No. 2 plant began and the construction was completed one year later.

Since the time before and after the merger was less than half a year, together with the rush of the New Wright No. 2 plant to start construction, in the view of Bright Dairy, the time was so tight that basically there was no “open window period”.

In Bright Dairy's high-end infant milk powder launch conference, recalling mergers and acquisitions at the time, Guangming Dairy President Guo Benheng admits to reporters that when he first stepped into the new Wright, based on different cultural backgrounds, both parties had business ideas and practices. Huge difference.

"Based on the current state of the domestic competitive environment, when we are advancing our strategic goals, we are accustomed to swiftly attaching importance to speed, adjusting tactics at any time according to the current situation, and they are expecting growth rates only a few percentage points per year. They are accustomed to step by step methods. The rhythm of management’s daily business decision-making also emphasizes the process of structuring everything and earnestly implements every budget. Everything is based on falling paper, and they do not like to adjust and change halfway.” said Guo Benheng, “They’re doing things in a relaxed manner, and our Strategic deployment tends to take a fast-paced route. The great contrast between the two sides makes them unable to keep up with our pace at first, and even some do not understand it, but slowly through a period of running-in, they also adapted to our work rhythm.”

"In fact, the complex problem is really simple to solve. It is to persist in seeking common ground while making a difference, and professional division of labor to perform their duties." said Guo Benheng.

Currently, Bright Dairy holds 3 seats in the 5 board seats of New Wright, and has absolute control over New Wright. The original Wright team is responsible for specific business execution.

“The bottom line of Bright Dairy is to firmly grasp the control of the board of directors and be responsible for the formulation of strategic planning. New Wright is responsible for operational management at the business level, allowing differences in tactics and methods, but it must be consistent with Bright Dairy in the strategic direction.” Guo Benheng Emphasize.

The acquisition of New Wright has helped Bright Dairy achieve its strategy of building an overseas platform for high-end infant milk powder. The new Wright 2 plant has an annual production capacity of 50,000 tons.