Tuesday 4th May 2010 |
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A2 Corporation, which licenses techniques to identify milk with a protein variant claimed to have health benefits, said it has suspended talks with Australia’s Freedom Nutritional Products over a full merger.
“The parties believe that there may be an outcome preferable to a full merger of equals and, as such, discussions about a full merger have been suspended,” the companies said in a statement today. “The on-going discussions involve a potential merger of FNP’s interests in the Australian joint venture A2 Dairy Products Australia with A2C, in exchange for shares in A2C.”
The exclusivity arrangements between the two companies have ended. Earlier this month, A2 and ASX-listed Freedom Nutritional Products said they were in talks to create a merged company with a market value of $62 million.
The enlarged company would trade on the ASX, they said in a statement. Unprofitable A2, which has seen its shares sink 70% over the past five years, has struggled to gain traction in the South Korean market, where its former partner withdrew the products and a rival firm began marketing an A2 infant formula.
It is reviewing its strategy for North America, a region the company describes as “a major challenge.” Its Australian joint venture is growing in line with expectations, according to the company’s interim report.
Shares of A2 Corp. fell 1 cent to 8.5 cents yesterday, valuing the company at $32 million. Freedom Nutritional was last at 33 Australian cents on the ASX, giving it a market value of A$27.9 million.
Businesswire.co.nz
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