Canadian dairy Saputo to acquire Australian dairy processor Murray Goulburn

Saputo Murray Goulburn deal : Canadian dairy company Saputo will acquire Australian dairy processor Murray Goulburn Co-Operative for a price of $1.01 billion to consolidate its footprint in the Australian market.

Saputo Acquisition of Murray Goulburn

The acquisition of Murray Goulburn adds to the recent take over by Saputo of the Warrnambool Cheese & Butter (WCB) earlier in the year. Prior to that in 2014, the Canadian dairy company had acquired a stake of 87.92% in Warrnambool Cheese & Butter.

Saputo acquisition of Murray Goulburn is anticipated to add to and complement the business operations of Saputo’s Dairy Division (Australia).

The Canadian dairy company intends to inject more investments in its Australian platform and work towards the ongoing development of both its regional and international business.

Murray Goulburn or MG, in short, manufactures a comprehensive line up of dairy foods. These include milk, milk powder, dairy beverages, cheese and butter. Besides, the Australian dairy processor is a manufacturer of various ingredient and nutritional products such as infant formula.

Murray Goulburn has a workforce of 2,300 employees and has eleven dairy manufacturing facilities located across Australia and China. Its dairy products are supplied domestically and internationally to retail and foodservice sectors.

For the twelve-month period that ended on 30 June, 2017, Murray Goulburn revenue touched around $1.95 billion.

Commenting on Saputo acquisition of Murray Goulburn, John Spark, the chairman of the  Australian dairy processor said that the transaction with the Canadian dairy company is the best available option for the suppliers and investors of the company.

John Spark further said: “This transaction will crystallise real value for MG’s equity, whilst rewarding our loyal suppliers through the milk supply commitments.

“MG has reached a position where, as an independent company, its debt was simply too high given the significant milk loss. Securing a sustainable future for MG’s loyal suppliers is of paramount importance to the Board.”

Saputo acquisition of Murray Goulburn is likely to be closed in the first half of 2018. It would however needs to be approved by the Murray Goulburn shareholders besides meeting other customary conditions like foreign investment approval and the Australian Competition and Consumer Commission’s clearance that the Saputo Murray Goulburn deal would not affect competition in the Australian dairy industry.