AUSTRALIA – Bega Cheese, an Australian-owned and operated cheese company located in the Bega Valley of new south wales, has finally reached an agreement with Vitasoy Intl. Holdings about the price of its stake in their joint venture.
The two companies jointly owned Vitasoy Australia up until October last year when Vitasoy announced its intentions to acquire Bega’s share of the business.
Vita International had initially pledged A$27.5 million (US$17.5M) for Bega Cheese’s 49% stake in their plant-based beverages joint venture, but it was termed significantly undervalued and hence rejected.
Vitasoy renewed the offer to A$51 million (US$36.6M) which the company accepted after an unnamed expert determined it “a fair value” for the 49% stake.
In a recent stock-exchange filling, Bega cheese said they recognize the growing market importance of plant-based beverages and products and they intend to assess their continued involvement in the sector.
During a transition period that will stretch to 31 March, another Bega Cheese subsidiary – BDD Milk – “will provide transition services including the sale and distribution of Vitasoy Australia’s products in Australia”, according to Bega Cheese.
Vitasoy Australia manufactures a range of plant-based milk, beverages and yoghurt products with markets in Australia and New Zealand as well as overseas, particularly popular in Asia among lactose-intolerant people.
Bega Cheese inherited the 49% share in the Vitasoy subsidiary after it acquired Lion Dairy & Drinks in 2021.
The Lion Dairy and Drinks acquisition cost US$385 million which led to Bega Cheese doubling in size and in terms of both annualized revenue and employees.
With the acquisition, Bega Cheese expanded its cold chain distribution network to become one of the major players in the country with an increase in its proportion of sales from 59% to 80%.
In the 2022 financial year, Bega Group reported earnings of US$149 million before interests, taxes, depreciation and amortisation.
The sale gives Vitasoy International full control of the venture at a time when the Australian plant-based milk category is burgeoning with socially conscious and health-driven café customers driving demand.
According to data from IRI Total Business Scan, the Australian plant-based milk category is worth US$380 million with annual growth of around 11.7%.
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