Australian dairy firm Warrnambool Cheese and Butter Factory has joined a bid by National Foods to buy Dairy Farmers.
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The two companies unveiled their plans today (4 June) and became the latest consortium to indicate an interest in Dairy Farmers, one of Australia’s largest branded dairy businesses.
National Foods, which is owned by Japanese conglomerate Kirin Holdings, had already sought regulatory clearance to buy Dairy Farmers.
Under its plans with Warrnambool, the two companies would set up a venture to run the Dairy Farmers cheese business. Warrnambool would supply the venture with bulk cheddar, while National Foods would market the products in Australia.
National Foods MD Ashley Waugh said the two companies had “complementary skills” to run the Dairy Farmers cheese business.
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By GlobalDataWarrnambool CEO Neil Kearney said a successful acquisition would give the company “exposure” to brands including Coon and Cracker Barrel. “Dairy Farmers provides an exciting opportunity for Warrnambool to significantly expand our interest in cheese,” Kearney added.
However, there promises to be a fierce battle for Dairy Farmers, which has been valued at between A$800m (US$769m) and A$1bn.
Since putting itself up for sale, Dairy Farmers has attracted firm interest from two other bidders – New Zealand dairy giant Fonterra and a proposed joint bid from Parmalat and local co-operative Murray Goulburn.
Parmalat and Murray Goulburn have already indicated that they would split Dairy Farmers in two.
Although the precise split is yet to be determined, one company, to be called Fresh Dairy Co, would merge the fresh milk operation of Dairy Farmers, Parmalat and Murray Goulburn. Fresh Dairy would control an estimated 50% of Australia’s branded liquid milk sales.
Under the proposal, Parmalat would take a 51% stake in Fresh Dairy and have operational control while Murray Goulburn would hold 49% of the newly formed business.
Murray Goulburn would acquire the non-fresh dairy operations of Dairy Farmers, including cheese, UHT milk and milk powder.
