China Mengniu set to acquire Lion Dairy from Kirin in $600m deal

Hot on the heels of the Bellamy’s takeover, China Mengniu is set to further increase its share of the Australian dairy sector.

A clerk stocks China Mengniu Dairy Co. products at a supermarket in Beijing, China. Picture: Bloomberg

ONE of China’s biggest milk processors is on track to own a swag of Australian household brands, confirming it intends to acquire Lion Dairy and Drinks.

Less than a fortnight after its $1.5 billion deal to buy Bellamy’s, China Mengniu Dairy has agreed to purchase Lion from Japanese brewer Kirin Holdings for $600 million.

The Bellamy’s deal was approved by the Foreign Investment Review Board last week and Mengniu’s takeover of Lion would also need to get the FIRB green light.

If successful, the company partially owned by the Chinese Government would gain some of Australia’s best-known dairy brands including Pura, Dairy Farmers, Big M, Dare and Farmers Union iced coffee, along with Vitasoy products.

In a statement, Mengniu Dairy chief executive Jeffrey Minfang Lu said the company expected the deal to be completed in the first half of 2020.

“This acquisition brings together the best of the east and west, harnessing Mengniu Dairy’s networks in existing markets and (Lion Dairy and Drinks) 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 was formed in October 2009 when Kirin purchased brewer Lion Nation and merged the business with National Foods, which it purchased two years prior.

Kirin shares jumped as much as 0.6 per cent in early trading in Tokyo today.

China Mengniu added as much as 0.5 per cent on the Hong Kong exchange.