Canadian dairy giant Saputo has agreed to acquire Australia-based dairy processor Murray Goulburn Co-Operative (MG) for CAD1.29bn ($1.01bn).
The is expected to complement the operations of Saputo's Dairy Division (Australia).
Saputo plans to carry on investments in its Australian platform and help towards the current development of its domestic and global business.
Murray Goulburn is into the production of a complete range of dairy foods that include milk, milk powder, butter, cheese, and dairy beverages along with a variety of ingredient and nutritional products like infant formula.
With about 2,300 employees and operations across eleven manufacturing facilities in Australia and China, Murray Goulburn supplies its dairy products globally to retail and foodservice industries.
The Australian dairy processor made revenues of around A$2.5bn ($1.95bn) for the twelve-month period ended on 30 June, 2017.
MG chairman John Spark revealed that the board of directors of MG believes that the transaction with Saputo is the best available outcome for the company’s suppliers and investors.
Spark added: “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 has been active in Australia through its acquisition of Warrnambool Cheese & Butter (WCB). In 2014, it had acquired 87.92% of WCB and this year, it took total control of the company by buying out the remaining stake.
Its acquisition of Murray Goulburn is anticipated to be completed in the first half of 2018. However, it will be subject to the approval of shareholders of Murray Goulburn along with customary conditions that include foreign investment approval and clearance by the Australian Competition and Consumer Commission.
