Bonlac Foods of Australia today [Tuesday] announced it is in talks to merge with Murray Goulburn, the farmer-owned dairy cooperative.


“The transaction would result in the consolidation of Bonlac within Murray Goulburn,” Bonlac said in a statement. Minority shareholder Fonterra of New Zealand is reported to be in agreement with the merger plans, reported Reuters.


International market prices for dairy commodities have been falling fast, and consolidation may be the only way to ensure Bonlac’s long-term survival. Murray Goulburn made a bid for Bonlac two years ago, largely in an attempt to block its merger with Fonterra (at that time the NZ Dairy Board).


Bonlac has been struggling for some time, and the involvement of Fonterra has failed to resolve its financial difficulties to the degree it had hoped.

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