Andrew Forrest’s Tattarang weighs into Bega bid for Fonterra

Andrew ‘Twiggy’ Forrest’s investment group says Bega acquiring Fonterra’s Australian assets is “in the best interests” of the industry. Here’s why.

Andrew Forrest’s private investment group Tattarang has thrown its weight behind Bega’s bid for Fonterra’s Australian assets, in a race against a swag of multinational competitors.

Tattarang bought into Bega three years ago as part of its suite of famed Australian brands including RM Williams and Akubra, and now owns 11.5 per cent of the food manufacturer.

Fonterra announced it was exiting Australia three years ago, with potential suitors including Japanese foodstuffs brand Meiji, French multinational Lactalis and Dutch dairy brand Friesland Campina all vying for Fonterra’s sizeable Australian footprint.

Market analysts say Fonterra is likely to net at least $NZ2bn for its Australian consumer, food service and ingredients business, with a portfolio of factories including Cobden, Stanhope and Darnum in Victoria.

Tattarang chief executive John Hartman noted the support of dairy leaders across southeastern Australia for the Bega bid.

“Tattarang supports Bega’s bid for Fonterra’s branded business in Australia and New Zealand because it is local – and we believe that’s the best outcome for the industry,” Mr Hartman said.

“Bega has deep roots in regional communities and a long-term commitment to our dairy farmers.

“Securing local ownership would ensure these assets remain aligned with the interests of local farmers, workers and consumers for the long haul.”

Andrew Forrest and Tattarang chief executive John Hartman.

A hurdle in Bega’s bid, according to Kidder Williams managing director David Williams, is the Australian processor being locked out of Fonterra’s data room, despite publicly expressing its desire to buy Fonterra’s Australian assets.

Last week Mr Williams, who is acting on behalf of Bega said “there is no other Australian (potential) purchaser except Bega”.

“We’ve applied to the ACCC for a ruling on our ability to buy the Australian assets — that doesn’t mean we want to buy the world assets, by the way,” Mr Williams said.

“There are some issues here with the foreign takeovers act — the FIRB (Foreign Investment Review Board). Under the legislation for the FIRB, if you’re selling a rural asset, like a land asset, it has to be advertised and it has to be offered to Australians.

“Overriding that, the Treasurer has the ability to make his own decision about whether it’s in the national interest or not.”

Bega secured Lion Dairy and Drinks in 2021 after then treasurer Josh Frydenberg rejected a $600m proposed acquisition from China Mengniu Dairy over foreign investment concerns.

Treasurer Jim Chalmers is yet to comment on the matter.