NZ dairy giant Fonterra joins bidders for Murray Goulburn

New Zealand dairy giant Fonterra has confirmed it’s made a bid for Australia’s largest milk processor, Murray Goulburn.

Victorian farmer Donna Edge has been selling her milk to Murray Goulburn. Pic: David Geraghty

New Zealand dairy giant Fonterra has confirmed it’s made a bid for Australia’s largest dairy processor, Murray Goulburn.

“The answer is yes we have put forward a proposal,” managing director of Fonterra Australia, Rene Dedoncker, told ABC radio today.

“It’s non-binding and indicative and at this point we are going to sit tight and give the MG board the respect they deserve to consider all proposals.”

It comes after investment bank Deutsche called for first round bids for Murray Goulburn by Friday, September 15.

The Australian last week reported a number of dairy groups were believed to have made offers for Murray Goulburn, among them a2, Fonterra, Saputo, Parmalat and Bega Cheese. Also among them was Chinese dairy powerhouse Yili, which was said to have made a significant bid.

Mr Dedoncker was speaking after Fonterra today posted an 11 per cent fall in full-year profit.

He would not elaborate on Fonterra’s bid but said a combined Murray Goulburn and Fonterra could work well.

“In many respects we’re not that different,” he told ABC radio. “When they (the Murray Goulburn board) are ready to talk we will be there and at some point when the boards are aligned there may be news.”

Fonterra Australia’s Rene Dedoncker. Pic: Aaron Francis

Combining Fonterra and Murray Goulburn would create a milk processor that could collect between 40 and 50 per cent of the milk produced in Australia, posing competition issues.

Murray Goulburn hired investment bank Deutsche to embark on a strategic review in recent months after farmers started deserting the company to other suppliers.