Reuters — Australia’s competition regulator on Wednesday approved a planned $1 billion takeover of the country’s largest dairy processor, Murray Goulburn Co-operative, by Canada’s Saputo.
The deal, which Australia’s largest dairy processor says is key to its survival, was approved after Saputo agreed to sell a milk plant in Victoria state to address concerns from the Australian Competition and Consumer Commission.
“Saputo’s divestiture undertaking has remedied the ACCC’s competition concerns about the Koroit plant,” ACCC chairman Rod Sims said.
Farmers had expressed concerns about any short-term ACCC intervention in the transaction because they wanted certainty after “a bumpy ride with Murray Goulburn,” Sims added.
The Melbourne-based company has struggled since 2016 when plans to sell high-margin products such as infant formula in China led it to overpay for source milk, while sales also fell below expectations.
Saputo, Canada’s biggest cheesemaker, agreed to sell the Koroit dairy plant to ease concerns the deal would leave some Victorian farmers with little choice when selling their milk.
The deal is subject to the approval of shareholders. Murray Goulburn plans to hold a meeting on Thursday to vote on the deal.
— Reporting for Reuters by Aditya Soni in Bangalore.