Australian food and dairy company Bega Group intends to seek “informal merger clearance” from the country’s competition watchdog for a “potential” acquisition of Fonterra’s Oceania business unit.
In a filing with the Australian Securities Exchange today (16 June), Bega Group said it plans to “lodge an application” with the Australian Competition and Consumer Commission (ACCC) “imminently”.
It is seeking to acquire New Zealand dairy giant Fonterra’s operations in Oceania, which includes Australia, put on the market last year alongside the local business and operations in Sri Lanka.
The planned disposals are part of Fonterra’s strategy to exit its consumer-facing operations to focus on dairy ingredients and the foodservice channel. Last November, the cooperative said it would consider either a complete or partial sale of the assets or an IPO.
Fonterra Oceania comprises the operations in New Zealand and Australia serving the retail, out-of-home and B2B channels.
Bega Group said today it “believes that if it were to be included in the sale process and the successful acquirer of the Oceania assets, it would significantly enhance outcomes for the company and the dairy industry as a whole, particularly in Australia”.
The company added: “The combination of the Fonterra and Bega Group assets in Australia would lead to greater efficiencies and enhanced outcomes for Australian farmers, customers and consumers.”
Bega Group will have to fight off other potential suitors, including another dairy giant in Lactalis in France.
The ACCC announced in May this year that it had received a proposal from Lactalis to acquire Fonterra’s global consumer business and the co-op’s dairy and ingredients foodservice businesses in Australia.
It has also been speculated, but never confirmed, that Canada-based dairy major Saputo, Japan’s Meiji Holding Co., and US investment company Warburg Pincus might also be interested in acquiring Fonterra’s up-for-sale businesses.
Bega Group said today that it will “work constructively with Fonterra Group on the sale of its Oceania businesses of which Bega Group is the natural acquirer and in which it remains very interested”.
The group, headquartered in Bega town, New South Wales, has a diverse portfolio, including brands such as Vegemite spreads, Bega Peanut Butter and Dairy Farmers milk.
First-half results issued in February showed Bega Group registered a 3% increase in revenue to A$1.8bn ($1.17bn).
Normalised EBITDA rose 44% to A$110.3m while net profit after tax surged to A$35.9m from A$13.3m a year earlier.
