The parent company for brands including Dairy Farmers, Pura, Dare, Farmers Union, Yoplait will be sold to dairy company China Mengniu for $600 million.
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This marks the takeover of one of Australia’s largest dairy groups following a 12 month wait on the market for owner, Lion Dairy & Drinks. The decision to sell comes as Lion attempts to pivot to become a more alcohol-centric firm.
China Mengniu will pay Japanese firm Kirin, which owns Lion Dairy & Drinks, $600 million for the dairy and drinks portfolio, provided the deal is approved by the Australian Competition and Consumer Commission and the Foreign Investment Review Board.
The deal is expected to settle in the first half of 2020.
Lion brands also include Berri, The Juice Brothers, Vitasoy soy milk and Dairy M, and involved partnerships with 280 dairy farmers and 85 fruit growers. It also makes up around 20 per cent of Australia’s milk market.
Lion Dairy & Drinks also employs around 2,300 people across Australia, China, Singapore and Malaysia.
China Mengniu has also launched a $1.5 billion pitch to buy formula brand Bellamy’s Australia.
“We believe that Mengniu Dairy, a specialty dairy player, is an ideal owner to take Dairy & Drinks forward, given its track record of investing in the Australian dairy industry, together with its global reach and deep capabilities,” Lion CEO Stuart Irvine said.
“Bringing the businesses together will help drive Mengniu Dairy’s growth in the Australian domestic market, while also accelerating Dairy & Drinks’ aspirations in South East Asia and China.
“In addition, Dairy & Drinks will benefit from access to leading-edge dairy research and development capability and further investment as part of the Mengniu business.”
Lion also owns Lion Beer Australia which holds XXXX, Boag’s Brewery and Little Creatures.
These brands are unaffected by the deal.
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