Bega Cheese has agreed to acquire Australian Lion Dairy & Drinks from Kirin Holdings for AUD 560 million ($412 million), taking ownership of brands such as Dairy Farmers and Pura.
The news comes after Kirin Holdings and China Mengniu Dairy terminated their deal for Lion’s business for $429 million, after it was likely to be blocked by the Australian government.
The deal includes the manufacture, marketing, sales and distribution of Lion’s portfolio of white milk, milk-based beverages, yogurt and chilled juice, as well as the company’s licensing agreement for the Yoplait brand.
Under the terms of the agreement, Bega Cheese will also take ownership of the Lion Dairy & Drinks international business, in addition to its share of the joint ventures Vitasoy Australia Products and Capitol Chilled Foods Australia.
With the acquisition, Bega Cheese says it will grow its product portfolio, entering new categories such as culinary (cream and custard) that will join its Vegemite and Kraft peanut butter.
According to Bega Cheese, Lion Dairy & Drinks also has Australia’s largest national cold chain distribution network supplying food service and convenience stores. The company will expand Bega’s manufacturing footprint with the addition of its 13 sites.
“The expanded product range, manufacturing and distribution infrastructure and brand portfolio realises our ambition of creating a truly great Australian food company,” said Bega Cheese executive chairman, Barry Irvin.
Together with the sale of the specialty cheese business to Saputo, the completion of this acquisition will represent a full divestment of the Lion Dairy & Drinks business. Upon closing the deal, the retained Lion business aims to become a leading global, crafted adult drinks business.
“The completion of the sale will enable further investment behind our priority categories of core beer, craft beer and seltzer in both domestic and international markets,” added Lion CEO, Stuart Irvine.
Unlike the China Mengniu agreement, this deal does not require any further regulatory approvals and is expected to be completed at the end of January 2021.
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