Bega Cheese will pay $560 million to acquire Lion Dairy and Drinks and its portfolio of products including household names like Big M, Yoplait, Farmers Union, Pura and Daily Juice
Bega Cheese chairman Barry Irvin has confirmed the purchase of Lion Dairy and Drinks, saying it will create significant value for shareholders.
Bega Cheese plans to raise about $401 million through a share offering to help cover the $560 million it will pay for the Lion Dairy and Drinks business.
The sale is $40 million less than what Chinese suitor China Mengniu Dairy Company offered to pay for the business in November, 2019.
That deal collapsed last August following concerns issued by Federal Treasurer Josh Frydenberg over China’s expansion into Australia’s dairy industry.
Mr Irvin said, “The acquisition delivers important industry consolidation and value creation with synergies across the entire supply chain. The expanded product range, manufacturing and distribution infrastructure and brand portfolio realises our ambition of creating a truly great Australian food company.”
Significantly, LD&D also has Australia’s largest national cold chain distribution network supplying food service and convenience stores. The Company has a national manufacturing footprint comprising 13 sites.
The combined business is expected to generate revenue in excess of $3 billion annually.