Nishat Mills Limited (PSX: NML) has approved a proposed move to exit the dairy business by selling its entire 49.10 percent stake in Nishat Sutas Dairy Limited to its Turkish joint venture partner, Sutas Sut Urunleri A.S.
The decision comes as pressure across Pakistan’s dairy industry continues to affect business conditions and weigh on the financial position of companies operating in the sector.
The Nishat Mills board approved the proposed transaction during an emergent meeting held on August 19. Under the agreement, the company plans to sell its complete shareholding in Nishat Sutas Dairy to its Turkish partner.
The proposed transaction values the stake at Rs. 5 per share. However, the deal is not yet final because it remains subject to shareholder approval as well as the completion of necessary legal and regulatory requirements.
The planned divestment represents a significant change in Nishat Mills’ involvement in Pakistan’s dairy sector. By selling its entire stake, the company would effectively withdraw from the joint venture and reduce its direct exposure to the challenges facing the dairy industry.
The dairy sector has been dealing with several pressures, including rising operating costs, changes in consumer demand, taxation concerns, and broader economic challenges. These factors can affect production costs and profitability throughout the supply chain.
For Nishat Mills, the proposed sale could allow the company to reassess its investment portfolio and focus resources on businesses with stronger financial prospects. Divesting from a pressured segment can also help a company manage capital more efficiently.
Nishat Sutas Dairy was established through a partnership involving Nishat Mills and the Turkish dairy company Sutas Sut Urunleri A.S. The proposed transaction would transfer Nishat Mills’ full 49.10 percent holding to its Turkish joint venture partner.
The deal also highlights the role of foreign partnerships in Pakistan’s food and dairy industry. With the Turkish partner potentially becoming the sole owner of the stake currently held by Nishat Mills, the future direction of the dairy business could change following completion of the transaction.
Investors will likely monitor the proposed sale closely because the transaction could have implications for Nishat Mills’ investment portfolio and future financial strategy. The final impact will depend on the completion terms and how the company utilizes the proceeds from the divestment.
The Rs. 5-per-share valuation will also remain a key detail for shareholders as they assess the proposed transaction. Since shareholder approval is required, the deal must pass through the relevant corporate process before it can be completed.
The proposed exit comes at a time when companies across Pakistan are reassessing their investments amid challenging economic conditions. Businesses are increasingly evaluating whether individual operations can deliver sustainable returns under changing market conditions.
For Nishat Mills, the decision to sell its dairy stake signals a strategic shift away from the business. If approved and completed, the transaction will mark the end of the company’s direct ownership interest in Nishat Sutas Dairy.
The development will now move to the shareholder and regulatory stages. Investors will be watching for further announcements regarding approval, completion of the transaction, and the future structure of the dairy venture.
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