Bega Cheese in trading halt as Lion Dairy and Drinks deal looms
Bega Cheese has been placed into a trading halt on the Australian Securities Exchange — with speculation abounding over its next move.
BEGA Cheese has been placed in trading halt today with speculation mounting it was set to buy Lion Dairy and Drinks.
Japanese news outlet Nikkei Business Dairy is reporting Japan’s Kirin Holdings Co has sold Lion Dairy to Bega for US$385 million ($A527 million).
The putative agreement follows the August collapse of a deal between Kirin and China Mengniu Dairy Co for the latter to acquire Lion Dairy, following concerns issued by Federal Treasurer Josh Frydenberg over foreign investment.
Meanwhile, dairy farmers have backed Bega’s rival in the two-horse race to buy Lion, after Canadian firm Saputo was knocked out on Friday.
The Dairy Farmers Milk Co-operative, which holds the exclusive contract to supply Lion, is backing Tanarra Capital’s bid to buy the company, arguing the bid by Bega could further reduce competition and lower farmgate milk prices.
The co-op argues if Bega is successful, it would own five of the seven milk processing plants in central NSW and control more than a third of farmgate milk in the region.
Tanarra’s bid is backed by Australian superannuation funds. A final decision on the successful bid is expected as soon as this week.
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