TGIF Flux fam!

Here's everything you need to know today - in under 3 minutes.

Today's big stories:

🍼 A2 Milk is looking for new growth avenues as the Chinese baby formula market shrinks

🎁 Woolies is giving shareholders $2bn after its demerger from Endeavour Group

🧘‍♀️ Headspace is merging with mental health service Ginger to form Headspace Health

Oh, and get this...

OnlyFans, which is famous for its 18+ content, made headlines when it revealed it was gonna ban sexually explicit content from 1 October...But that didn't last long. They've backflipped completely, and now, they're bringing sexy back!

A2 Milk looking for milk buyers as the Chinese market shrinks

Background: A2 Milk is the Aussie milk company worth nearly $5bn. But it ain't your average milk company. They sell a special milk without the A1 protein (aka the protein found in dairy cows). And they also sell a tonne of baby formula.

What happened: The Chinese market for A2's baby formula products makes up nearly half of the business' revenue. But COVID hit and stopped Chinese buyers from easily accessing Aussie products. It also saw China's birth rate drop.

What else: As a result, A2 suffered some pretty hefty losses. We're talking 30% revenue declines and 80% NPAT declines. And without the Chinese market, A2 needs a new game plan.

So what's the key learning?

💡The Chinese baby formula market is a huge win for Aussie milk producers like A2. And it all started back in 2008, when the 'melamine scandal' saw more than 300,000 Chinese babies poisoned by baby formula.

💡Since then, Chinese parents have been pretty sceptical about the local milk formula industry. Instead, they turned to overseas providers like A2.

💡But when COVID hit, it was tough for anyone to send anything overseas (daigous anyone?). So local producers picked up the slack, and started rebuilding trust in their own brands. Now, with China's domestic producers as competition, Aussie producers need to step up their game, or find a new strategy.

Woolies is giving $2bn back to shareholders after demerging from Endeavour Group

Background: Woolies - aka the Fresh Food People - are one of the big dogs in Aussie supermarket land. And until June this year, they used to own two of Australia's biggest booze companies: Dan Murphy's and BWS. Oh, and a massive pubs & pokies chain.

What happened: Woolies' pubs, pokies and liquor bizzo was called Endeavour Group. But as of June, this crew have broken up harder than Brangelina. In other words, Endeavour and Woolies have demerged to form two separate companies.

What else: Woolies said it wanted to focus on itself. But really, it just didn't want to be associated with Endeavour's pokies assets anymore. 'Cos that don't sit well with their sustainability efforts. The de-merger freed up a lot of cash, which is why Woolies is now giving back $2bn to shareholders. Yay!

So what's the key learning?

💡 We know the sharemarket loves a merger. But it also loves a demerger - when two companies split out to form their own individual companies.

💡Oz has a pretty good track record with demergers. In fact, Coles, Treasury Wine Estates and BlueScope were all the result of demergers.

💡Demergers can be pretty successful when they are done properly. They allow businesses that were previously trapped inside a conglomerate...to do their own thang. It also offers valuation transparency. In other words,the market generally values two separately listed companies at a higher value because it is clearer where the value lies.

Headspace and mental health service Ginger are merging to form Headspace Health

Background: Headspace was founded back in 2010 and was backed early on by big names like Jessica Alba, Jared Leto and even Ryan Seacrest.

What happened: Fast-forward to today, and Headspace is a guided meditation app with more than 65 million downloads. And, it's been valued at more than $440 million. ‍

What else: After a pretty tough year for most people around the world, Headspace is merging with Ginger - an on-demand mental health service that connects users with mental health coaches, therapists and psychiatrists. The new biz will be called Headspace Health.

So what's the key learning?‍

💡 We all know about the COVID pandemic, but behind it is a shadow pandemic of declining mental health.

💡 And it's not lost on big businesses: the mental health app market is growing at over 20% year-on-year.

💡 Since Ginger and Headspace operate in different parts of the same market (Ginger in the clinical side and Headspace in the self-directed meditation side) Headspace Health will be the biggest digital provider of mental health services. Cop that, Calm.