Saputo Dairy Australia has entered into a definitive agreement to sell two fresh milk processing facilities to Coles Group, an Australian public company operating several retail chains.
The facilities, based in Victoria and New South Wales, each have the capacity to process around 225 million litres of fresh milk a year and are predominantly used to process Coles’ branded 2l and 3l formats. The acquisition will enable the supermarket to become a milk processor for the first time.
The transaction, expected to close in the second half of 2023, is valued at AUD 105 million (approx. $72.4 million) and is subject to customary conditions, including clearance from the Australian Competition and Consumer Commission.
Lino Saputo, president and CEO of Saputo, said: “We’re continually working to ensure we have the right manufacturing footprint and product offering to enhance our position as a high-quality, low-cost processor”.
He added: “This marks an important step in executing our long-term vision for success in Australia as we maintain a sharp focus on efficiency to ensure we maximise the return on every litre of milk”.
The divestiture will enable Saputo to further streamline its operating model, adjust its manufacturing network to strengthen its position in the market and reinvest in areas of the business that will result in more value creation opportunities.
Coles’ CEO Steven Cain said in a statement: “These facilities are state-of-the-art, delivering exceptional production efficiency and quality through highly automated processes. While improving security of our milk supply and our supply chain resilience in the dairy sector, these facilities also have sufficient capacity to facilitate further growth opportunities through new product innovation.”
Coles confirmed that employees based at both facilities will be offered employment contracts with Coles.
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