Login
Bubs enters strategic agreement with Beingmate
Ashurst has advised Bubs on its strategic manufacturing agreement with Beingmate.
Tony Zhang
Firm: Ashurst (Bubs).
Deal: Global law firm Ashurst has advised infant nutrition and health product supplier Bubs Australia Limited (Bubs) on its memorandum of understanding (MOU) regarding a proposed strategic Chinese manufacturing arrangement with Shenzhen-listed Beingmate Co. Ltd (Beingmate), which is Bub’s existing Chinese joint venture partner and one of the largest Chinese-owned enterprises in the infant nutrition industry.
Area: Corporate advisory.
Key players: The Ashurst team was led by partner Kylie Lane, who was assisted by counsel Eliza Blandford (corporate transactions).
Deal significance: Bubs has entered into a strategic MOU with Beingmate, that records the parties’ intentions for the proposed acquisition by Bubs of an ownership interest in Beingmate’s manufacturing facility located in Beihai, China.
The transaction also includes Bubs China label goat infant formula being manufactured in China at the Beihai facility and sold through the existing joint venture company (in which Bubs has a 49 per cent interest) with Beingmate supporting Bubs in securing a State Administration for Market Regulation (SAMR) brand slot for Bubs China label goat milk infant formula.
“We are delighted to assist Bubs with this strategic agreement, which reflects a key milestone in its ‘Created by Bubs’ localisation strategy in China,” Ms Lane commented.
About 30 per cent of the money raised was pegged to buy a stake in Beingmate’s infant formula manufacturing facility in Beihai China, as part of an agreement signed between the two companies that was announced last week.
The deal would see a Chinese-labelled infant formula canned and packaged at the Beihai plant, using Bubs’ Australian goat milk.
Ashurst said the MOU reflects a key milestone in Bubs’ ‘Created by Bubs’ localisation strategy in China, a model that Bubs intends to explore replicating in other key jurisdictions.
The support to be provided by Beingmate with respect to the Chinese regulatory process will be instrumental in securing Bubs’ SAMR brand registration slot, allowing a faster route to market to the world’s largest and fastest-growing infant formula market (valued at $55 billion).
