US-based infant formula manufacturer Mead Johnson has agreed to acquire spray drying and finishing capabilities from Australian food group Bega Cheese for A$200m.
The deal includes one of Bega Cheese's spray dryers at Tatura and an infant formula finishing plant from the dairy firm in Derrimut, Australia.
The acquisition will accelerate Mead Johnson's push in the infant formula business in the Chinese market through additional capabilities.
As part of the deal, Bega Cheese has signed a 10-year service and access agreement with the American firm for the Derrimut plant.
For Bega Cheese, the divestiture of the assets would help it fund its recent acquisition of the Australian grocery business from Mondelez, including Vegemite as per Bega Cheese executive chairman Barry Irvin.
Mead Johnson president and CEO Kasper Jakobsen said that supply chain flexibility is significant in the pediatric nutrition segment.
Jakobsen said: “This acquisition further strengthens our ability to protect and expand our growth in China by creating both additional capacity and the ability to adapt to a changing regulatory environment.”
The deal builds on the existing relationship between Mead Johnson and Bega, which has been a certified distributor for the company’s products since 2009.
As per Mead Johnson global operations senior vice president Jeff Jobe, Bega Cheese is renowned globally for its pure, high-quality sourcing of dairy along with its operations that are environmentally friendly.
Jobe said: “These outstanding facilities – with which we are very familiar – are a perfect fit for our global supply chain network, which is built on our uncompromising commitment to scientific rigor and product quality.”
“In our drive to become even more consumer-centric, this move also enables us to better respond to evolving consumer preferences and to compete effectively in additional market segments in China.”
Earlier in the month, Mead Johnson Nutrition had agreed to be acquired by British consumer goods manufacturer Reckitt Benckiser for $16.6bn.
