A string of prominent Aussie brands including Big M, Pura, and Zooper Dooper have been snapped up by a Chinese company after it struck a major deal to buy a Melbourne-based business.
Peter Taylor and Bridget Carter, Herald Sun
November 25, 2019
China is poised to become a major player in Australia’s dairy and juice industries after a Chinese company struck a deal to buy a heavyweight beverage company.
Pura, Big M, Farmers Union and Berri are among the brands that will be owned by China Mengniu Dairy under the deal announced today.
The company has agreed to pay $600 million for the Melbourne-based Lion Dairy and Drinks business — one of the nation’s biggest milk processors.
Japanese beverage titan Kirin has owned the business, which was previously called National Foods, since 2007 but has been looking for a buyer in recent years.
Other brands covered by the transaction include Dairy Farmers and Dare, juice labels Daily Juice and Mildura and the Zooper Dooper flavoured iceblock brand.
It also includes Australian and South East Asian rights to the Yoplait brand.
The deal comes less than two weeks after China Mengniu Dairy secured approval from the Foreign Investment Review Board for its $1.5 billion buyout of infant formula supplier Bellamy’s Australia.
Federal MPs including Andrew Wilkie, Barnaby Joyce and Jacqui Lambie raised concerns about that takeover.
Based in Docklands, Lion Dairy & Drinks employs about 2300 people nationally. It has 11 factories around Australia and its suppliers include 280 dairy farmers and 85 fruit growers.
Kirin sold Lion’s Tasmanian cheese business, which includes the South Cape, King Island Dairy and Mersey Valley Brands, to Canadian dairy group Saputo for $280 million earlier this year.’
The original asking price for all the Lion assets on offer was about $1.4 billion, according to sources.
But the company in April slashed the value of its Australian dairy and juices portfolio by $530 million when offers did not meet expectations.
The Japanese company is holding onto Lion’s portfolio of beers, including Hahn, Furphy, James Boag and James Squire.
Its deal with China Mengniu Dairy will also need approval from the Foreign Investment Review Board.
China Mengniu Dairy has immediately started touting the benefits of its deal with Lion as it pushes for the green light.
In a statement, chief executive Jeffrey Minfang Lu said it would deliver significant benefits to both companies.
It would also provide opportunities for Australian dairy farmers, fruit growers and regional communities, he said.
“This acquisition brings together the best of the east and west, harnessing Mengniu Dairy’s networks in existing markets and (Lion) D & D’s leading brands and production capability,” Mr Lu said.
“I truly believe our proposed acquisition will bring tremendous opportunity for the entire Australian dairy sector, opening up a channel to our home market in a very significant way.”
Lion chief Stuart Irvine said the Chinese group would be an “ideal owner” for the rest of the dairy and juice business.
“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,” he said.
“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 are very confident that today’s announcement best positions both Lion and the Dairy & Drinks business to move forward and reach their full potential in the years ahead.”
Others to have run the rule over Lion Dairy and Drinks included another Japanese brewing heavyweight, Asahi, Coca-Cola Amatil and Freedom Foods.
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