AUSTRALIA – The Australian Competition and Consumer Commission has approved Saputo’s acquisition deal of Murray Goulburn and after it agreed to sell its Koroit plant within a specified period to an ACCC approved buyer.
MG’s Koroit plant was the only hurdle the ACCC identified in the US$1.3 billion deal announced last October at the MG annual general meeting in Melbourne.
Saputo is now confident that it can finalise the purchase of MG’s operating assets and liabilities by the start of next month.
Saputo Inc board chairman and chief executive Lino Saputo Jr said “we are very pleased” with the ACCC decision.
“This is an important milestone in the process of completing our acquisition of MG,” he said.
“We now await the Foreign Investment Review Board’s decision and the results of the MG shareholder vote.
We remain confident in our offer and expect to be able to finalise this transaction by 1 May 2018.
Our goal remains to continue to invest in Australia with a long-term perspective and ensure we have a strong and sustainable dairy industry.”
According to the Weekly Times, this deal will now go to vote at a MG extraordinary general meeting in Melbourne tomorrow, where it is expected to get approval from more than 50% of the MG shareholders.
The ACCC said, in a statement, that the divestment for Koroit would be “court-enforceable”.
“Saputo’s divestiture undertaking has remedied the ACCC’s competition concerns about the Koroit plant,” ACCC chairman Rod Sims said.
“The undertaking creates an opportunity for a viable competing milk processor to enter or expand in the local region.
When approving a new owner of Koroit, we will focus on its ability to be a strong and effective competitor for raw milk in the region.
“The ACCC has carefully considered responses from a broad range of market participants about Saputo’s undertaking and the broader transaction.
We heard from and spoke with many farmers who expressed concerns with the ACCC intervening in this transaction in the short term because they wanted certainty and stability after a bumpy ride with Murray Goulburn.
“I want to assure them that our aim is to put in place an outcome that works in their best interest by promoting competition in the medium to longer term while minimising short term uncertainty.”
The key elements of Saputo’s undertaking to divest Koroit include the divesture of all Koroit factory and all necessary assets, personnel and contracts to enable the purchaser to operate the Koroit plant and compete.
The sale must be completed within a prescribed timeframe to a purchaser that will be approved by the ACCC.
SAPUTO will supply a guaranteed volume of milk to the purchaser for a specified period.
SAPUTO must allow farmers who want to transfer their milk supply to the purchaser of the Koroit plant to do so.