AUSTRALIA – Japanese beverage company Kirin Holdings has confirmed a potential sale of its Australian dairy Unit Lion Dairy & Drinks to Bega Cheese in a deal estimated to be worth over US$400 million.
This is the second attempt by the Japanese beverage company to offload its Australian dairy unit after the first attempt to sell to China Mengniu Dairy failed following fears that it was likely to be blocked by the Australian government.
Founded in 1991 by Adelaide Steamship Company, Lion Dairy & Drink specialises in dairy food and juice, with core activities in milk, yoghurt, cream, dairy desserts, juice and specialty cheese.
Under the deal, Bega Cheese will take control Lion Dairy & Drink’s businesses including the manufacture and sales of Lion’s portfolio of white milk, milk-based beverages, yogurt and chilled juice.
Lion Dairy & Drink’s licensing agreement for the Yoplait brand is also part of the deal, according to a report by FoodBev.
Under the terms of the agreement, Bega Cheese will also take ownership of the Lion Dairy & Drinks international business, in addition to its share of the joint ventures Vitasoy Australia Products and Capitol Chilled Foods Australia.
With the acquisition, Bega Cheese says it will grow its product portfolio, entering new categories such as culinary (cream and custard) that will join its Vegemite and Kraft peanut butter.
“The expanded product range, manufacturing and distribution infrastructure and brand portfolio realises our ambition of creating a truly great Australian food company,” said Bega Cheese executive chairman, Barry Irvin.
Together with the sale of the specialty cheese business to Saputo, the completion of this acquisition will represent a full divestment of the Lion Dairy & Drinks business.
Upon closing the deal, the retained Lion business aims to become a leading global, crafted adult drinks business.
“The completion of the sale will enable further investment behind our priority categories of core beer, craft beer and seltzer in both domestic and international markets,” added Lion CEO, Stuart Irvine.
Unlike the China Mengniu agreement, this deal does not require any further regulatory approvals and is expected to be completed at the end of January 2021.
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