National Foods firms as favourite for Dairy Farmers takeover
Parmalat has failed to reach an appropriate agreement with their proposed joint venture partner, Murray-Goulburn, as they seek to acquire Dairy Farmers.
The two companies withdrew their application for ACCC clearance on Friday, with the Italian dairy giant citing an inability to come to a suitable arrangement as the reason for the decision. “Parmalat SpA communicates that no mutually satisfactory resolution on terms and conditions has been reached and consequently Parmalat has withdrawn from these negotiations,” they advised in a statement. The application by Parmalat and Murray-Goulburn had not been approved by the ACCC due to the competition watchdog’s concerns about the lessening of competition in some milk markets.
Reports suggest both companies are now considering separate bids, which could yet make the bidding for Dairy Farmers more competitive. Although the joint venture between National Foods and Warrnambool Cheese and Butter appears to be the front runner in the race to acquire the Australian dairy co-operative.
The National Foods led joint venture has already received ACCC approval, with NZ dairy co-op Fonterra likely to purchase the Ski brand from National Foods if they take control of Dairy Farmers. The Ski brand is a complicated part of discussions as it is currently owned by Dairy Farmers but due to be transferred to Nestlé in 2012. However, Fonterra are to takeover Nestlé’s yoghurt and dessert range (pending ACCC approval) which would mean Fonterra would own the brand in 2012. Consequently, they are keen to gain ownership of the brand before the 2012 date if possible.
The other company in the mix is Canadian dairy leader Saputo.
Saputo continue to remain quiet about their interest in Dairy Farmers but rumours linking them to a bid have been strong for the past month. The Canadian company has not required ACCC approval due to their present lack of significant operations in Australia.
Dairy Farmers is expected to be purchased for something in the vicinity of $900 million.