Bega Group eyes Fonterra prize in ASX precursor announcement

Agricultural powerbroker David Williams is urging the Treasurer to give Bega a fair go at acquiring Fonterra. Here’s the latest.

Federal Treasurer Jim Chalmers needs to clear a regulatory roadblock to give Bega a fair go at acquiring Fonterra’s Australian assets, agricultural powerbroker David Williams says.

Bega Cheese confirmed this week that it would seek informal merger clearance from the Australian Competition and Consumer Commission as part of its bid to acquire Fonterra’s Australian assets.

Bega has been locked out of Fonterra’s data room, despite publicly expressing its desire to buy the dairy processor.

Its exclusion relates to the long legal dispute over whether it has first right of refusal over the business because Fonterra has a commercial agreement in place to sell Bega-branded products.

Acting on behalf of Bega, Kidder Williams managing director David Williams 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,” he said.

“We’re still not officially in the process but we’re anticipating we will be.

“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.

“So here we’ve got a rural asset — how much land is in there, we have no idea because we’re not in the data room — but to the extent there is land in there it needs to be advertised and needs to be offered to Australians.

“It’s un-Australian to keep Australians out of the process.”

Kidder Williams managing director David Williams. Photo: Glenn Hunt

Last month, several farmer lobby leaders including Australian Dairy Farmers president Ben Bennett expressed support for Bega’s acquisition of Fonterra’s Australian assets, as international suitors emerged including Meiji and Dutch dairy brand Friesland Campina.

Last month, Bega’s biggest shareholder, Andrew ‘Twiggy’ Forrest and family, expressed support to acquire Fonterra.

“Not only is there an appetite from farmers for Bega (to purchase Fonterra), the same is also true from Australian fund managers,” Mr Williams said.

“What is also not well understood is that there are plenty of New Zealand farmers that are keen on (Bega buying Fonterra) and offering them the alternative cash or shares in Bega.”