Speculation has mounted today (26 August) that Fonterra could be planning to make a move on the processing plants that National Foods will be forced to sell should its planned acquisition of Dairy Farmers go through.
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National Foods looks set to snap up Australian dairy co-operative Dairy Farmers in a deal valued at A$910m (US$773.89m).
However, if the acquisition goes ahead the Australian Competition and Consumer Commission will require National Foods to sell milk-processing plants, depots and drinking milk distribution contracts in New South Wales and South Australia.
Fonterra, who initially signalled its interest in acquiring Dairy Farmers only to withdraw from the race for the company, is reportedly eyeing some of these facilities. However, the New Zealand dairy group has said that it is unable to comment due to confidentiality agreements.
Meanwhile, National Foods has told the local press that it is yet to line up a buyer for the facilities as the acquisition is still awaiting approval from Dairy Farmers’ shareholder farmers.
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By GlobalData“It’s a little premature to start having discussions to try and sell things that you don’t own yet,” a spokesperson for the company commented.
