DAIRY manufacturer The a2 Milk Company says its largest shareholder Freedom Foods Group has reduced its stake. But the Sydney-based Freedom Foods announced it will keep a strategic stake in a2 Milk.

Freedom said it had sold 42.5 million a2 shares but retained a holding of 75.2 million shares or 10.4 per cent of the company.

Freedom sold the shares for 73 cents each on market, raising a net A$28 million.

A2 Milk said Freedom had confirmed its “current intention” was to maintain a strategic stake in the company, and would continue to provide a2 Milk with production capabilities and milk supply in Australia.

Led by managing director Geoffrey Babidge, a2 Milk uses its patent on the a2 beta-casein protein to promote digestion-related “features and benefits” of a2-branded milk products.

The company has made inroads into the Australian supermarket shelves with its fresh milk in cartons.

In June shares in a2 Milk shot higher after it received an expression of interest from Freedom and another company to buy the manufacturing company.

That other company has been reported to be Texas food and beverage-based Dean Foods.

Shares in the dual listed a2 Milk on Wednesday were trading 3 cents lower at 76c on the NZX, following the release of the Freedom statement.

The shares are up 21 cents or 40 per cent over the last 12 months.