Wilmar

Wilmar: The ACCC announced today that it will not oppose the proposed acquisition of Goodman Fielder by Wilmar and First Pacific. The commission had initial concerns on the packaged edible oils market in Australia, on the overlap between Wilmar's existing edible oils wholesaling business, and Goodman Fielder's position as the leading supplier of branded edible oils to supermarkets. However, the commission concluded that there is no material overlap in this case, and the acquisition is unlikely to lead to competition concerns in the market. While the approval brings Wilmar one step closer to finalising the deal, Wilmar will only have a 50% stake in the JV, with Goodman Fielder making normalised profits of only A$63m in FY06/14, against house estimate of Wilmar's net profit at US$1,187m in FY14E. UBS remains Neutral with TP of $3.50.