China Mengniu Dairy in US$407m deal to buy Australian brands

Business | 25 Nov 2019 11:17 am

China Mengniu Dairy Co (2319) plans to buy the owner of some of Australia’s best known milk brands from Japan’s Kirin Holdings Co for A$600 million (US$407 million), its second Australian dairy buyout in two months, Reuters reports.

The sale of Lion Dairy & Drinks Pty would advance Kirin’s strategy of offloading underperforming assets outside Japan while giving the Chinese government part-owned company control of Australian household brands like Pura, Dairy Farmers and Moove flavored milk. The deal also includes brands such as Berri, Daily Juice, and The Juice Brothers as well as the yoghurt unit Big M, which produces Farmers Union and Yoplait.

The deal needs  approval from the Foreign Investment Review Board and the Australian Competition and Consumer Commission.

China Mengniu received Australian government approval to buy infant formula maker Bellamy’s for A$1.43 billion just 10 days earlier.

“Its access to the significant volume of highly-regarded Australian milk pool, its large scale of 13 manufacturing facilities across Australia and the extensive cold chain distribution network ... make (Lion Dairy) a strong comprehensive vertically integrated dairy player,” China Mengniu said in a statement.

Owning both Australian companies would give China Mengniu “a stronger foundation to excel in the Asia Pacific markets”, the Chinese company added.

Lion has been advised by Deutsche Bank as financial adviser, with King & Wood Mallesons as legal adviser. Greenhill & Co Australia have acted as independent financial adviser to Lion. 

Lion’s alcohol businesses in Australia and New Zealand, and its global Lion Little World Beverages business is not affected by the Dairy & Drinks sale process.-Reuters/The Standard 

 

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