A Chinese company's $1.5 billion takeover bid for Bellamy's Australia Limited could lead to a bigger Australian organic dairy and food industry.
That is according to Bellamy's chief executive Andrew Cohen.
Mr Cohen said China Mengniu Dairy Company Limited was a preeminent dairy company in China and an ideal partner for the Bellamy's business.
"It offers a strong platform for distribution and success in China, and a foundation for growth in the organic dairy and food industry in Australia," Mr Cohen said.
"Our employees, our trade partners and local organic manufacturers will continue to grow and thrive with the success of our business."
China Mengniu Dairy Company Limited chief executive Jeffrey, Minfang Lu said: "Bellamy's is a leading Australian brand with a proud Tasmanian heritage and track record of supplying high quality organic products to Australian mums and dads."
"This leading organic brand position and Bellamy's local operation and supply chain are critical to Mengniu."
Mengniu aims to acquire 100 per cent of Bellamy's shares via a scheme of arrangement.
It intends shareholders to get $12.65 in cash per share plus a 60c per share special dividend, the latter to be paid by Bellamy's before scheme implementation.
Bellamy's directors have unanimously recommended shareholders vote in favour of the deal, in the absence of a superior proposal and pending an independent expert concluding the scheme is in shareholders' best interests.
The offer was at a 59 per cent premium to Bellamy's share price of $8.32 at the close of trading on Friday and a 54 per cent premium to the three-month average share price to September 13.
Implementation of the scheme would be subject to approval by the Foreign Investment Review Board, as well as the shareholder vote.
Mengniu aims for implementation by the end of 2019.
Launceston-headquartered Bellamy's employs about 160 people in Australia, China and Singapore and produces, supplies and markets organic food and infant formula for babies and toddlers.
It distributes products in Australia, China, Vietnam, Malaysia and New Zealand, and through online channels.
Hong Kong-listed Mengniu has market capitalisation of about $24.6 billion and is 69 per cent owned by public investors.