Saputo Dairy Australia, the local arm of the Canadian dairy giant has made a deal to buy the troubled Australian co-operative Murray Goulburn for $1.3 billion.
The transaction is subject to approval by an ordinary resolution of MG’s voting shareholders at a MG shareholders’ meeting, as well as by the ACCC and the Foreign Investment Review Board and completion of other customary conditions. It is expected to close in the first half of calendar year 2018.
A statement by Saputo said that the acquistion reinforces its commitment to strengthen its presence in the Australian market; and that the company intends to continue to invest in its Australian platform and contribute to the ongoing development of its domestic and international business.
“The Board believes that the Transaction represents the best available outcome for our suppliers and our investors. Saputo is one of the top ten dairy processors in the world and active in Australia through its ownership of Warrnambool Cheese & Butter (WCB). This transaction will crystallise real value for MG’s equity, whilst rewarding our loyal suppliers through the milk supply commitments,” said MG’s Chairman John Spark in a statement.
“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. We are pleased with the strong milk commitments secured as part of Saputo’s offer to reward this loyalty. Saputo has demonstrated itself to be a credible and trusted partner for Australian dairy farmers through its investment in WCB. The Transaction has the unanimous support of the MG Board.”