CHINA – Chinese dairy giant, Mengniu Dairy has agreed to buy Kirin Holdings Co.’s Australian beverage unit Lion Dairy & Drinks for about 45.6 billion yen (US$419 million).
The deal includes all white milk, milk-based beverages, yoghurt, juice and water ice brands and assets as well as Lion Dairy & Drinks’ International business, and Dairy & Drinks’ share of the joint ventures Vitasoy Australia Products and Capitol Chilled Foods Australia.
The Dairy & Drinks business employs around 2,300 people across Australia with some people based in Singapore, Malaysia and China.
The portfolio includes Dairy Farmers, Pura, Dare, Farmers Union, Yoplait, Daily Juice, The Juice Brothers and Berri.
The Australian manufacturing footprint span 11 sites including milk, yoghurt and juice facilities.
The sale is subject to ACCC and Foreign Investment Review Board approvals and other standard closing conditions.
If approved, the transaction would bring to a close Lion’s lengthy bid to sell its Dairy and Drinks business, after the company announced its intention to sell the division last year.
In October, the Lion finalized the sale of its specialty cheese business to Saputo Dairy Australia for AUD$280 million (US$190m).
“When we announced the decision to sell the Dairy & Drinks business last year, we made clear our intention to identify the best future ownership arrangements for the Dairy & Drinks business,” said Stuart Irvine, CEO of Lion.
“Our aim throughout has been to ensure that both Dairy & Drinks and the Lion business are ideally positioned for growth – with the right people, assets and investment behind their respective strategies.
“We believe that Mengniu Dairy, a specialty dairy player, is an ideal owner to take Dairy & Drinks forward, given its track record of investing in the Australian dairy industry, together with its global reach and deep capabilities.
“Bringing the businesses together will help drive Mengniu Dairy’s growth in the Australian domestic market, while also accelerating Dairy & Drinks’ aspirations in South East Asia and China.
“In addition, Dairy & Drinks will benefit from access to leading-edge dairy research and development capability and further investment as part of the Mengniu business.”
The deal however does not include Lion’s alcohol businesses in Australia and New Zealand, and its global Lion Little World Beverages business.
Mengniu’s deal follows recent approval by the Australian government to acquire local infant formula maker Bellamy’s Australia Ltd for AUD$1.43 billion (US$568 million).