(Bloomberg) -- Fonterra Cooperative Group Ltd.'s strategic partnership with a2 Milk Co. Ltd. sent shares of its former rival surging and marked a change in attitude toward the company it once dismissed.
Auckland-based Fonterra, the world's largest dairy exporter, entered the wide-raging pact despite its Chief Executive Officer Theo Spierings having previously labeled its competitor just a “marketing concept.”
The deal is set to cover a range of supply, distribution, sales and marketing arrangements in targeted markets, according to Sydney-based a2 Milk.
Analysts' forecasts for A2 Milk's revenue this year represent a five-fold increase since 2015, and the stock has more than quadrupled in the past 12 months, driven partly by baby formula demand in China. The shares, which are listed in both Australia and New Zealand, are set to close at record highs, surging 25 percent as of 12:12 p.m. in Sydney, and up 26 percent in Wellington.
--With assistance from Vivek Shankar
To contact the reporter on this story: Jackie Edwards in Sydney at jedwards160@bloomberg.net.
To contact the editors responsible for this story: Divya Balji at dbalji1@bloomberg.net, Jonathan Annells, Kurt Schussler
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