National Foods and Warrnambool Cheese and Butter confirm interest in Dairy Farmers
National Foods Limited (NF) and Warrnambool Cheese and Butter Factory Company Holdings Ltd (WCB) yesterday announced their joint interest in pursuing an acquisition of Dairy Farmers. Although, their interest has been obvious since they sought a clearance from the ACCC for the proposed takeover back on April 17.
If National Foods are successful in acquiring Dairy Farmers, it is proposed that NF and WCB will form a joint venture to run the existing cheese business of Dairy Farmers. Key aspects of the current cheese joint venture proposal are that:
– It involves the cheese part of Dairy Farmers being jointly owned by NF and WCB with its’ operations limited to the current cheese brands, production, conversion and wholesale activities of Dairy Farmers.
– WCB will supply the cheese joint venture with the majority of its requirements for bulk cheddar cheese and NF will market and wholesale joint venture product in Australia.
The merger would bring together two experienced players in the Australian dairy industry with WCB the only dairy company listed on the ASX and National Foods, owned by Japan’s largest beer company Kirin, being one of Australia’s largest branded food and beverage businesses.
National Foods consider the joint venture to be ideal as it combines the strengths of both companies. “This proposed joint venture brings together complementary skills – brand management, sales and marketing skills from National Foods, and efficient cheese manufacture skills and capabilities from Warrnambool Cheese and Butter,” NF Managing Director, Ashley Waugh, claimed.
WCB believe the proposal could supply the impetus for extensive growth in their cheese division. “Dairy Farmers provides an exciting opportunity for WCB to significantly expand our interest in cheese,” WCB Chief Executive Officer, Neil Kearney, said. “This includes exposure to the Coon, Cracker Barrel and Mil Lel brands.”
Dairy Farmers, an Australian dairy co-operative owned by a group of about 2000 farmers, put themselves up for sale in March this year. Since then giant dairy companies Fonterra and Parmalat (in a joint venture with Murray Goulburn) have also outlined their interest and filed applications seeking approval from the ACCC.
The proposed dates for the announcements of the ACCC’s findings are all due in July. National Foods will be advised on July 3, Fonterra on July 10 and Parmalat and Murray Goulburn on July 17.