Chinese dairy company Yili makes substantial offer for Murray Goulburn

A CHINESE dairy juggernaut is courting Australia’s biggest milk processor, Murray Goulburn Cooperative, lobbing a buyout offer for the group, sources say.

Yili, which makes milk products for the Chinese market, is rumoured to the be in the box seat for the struggling Melbourne-based cooperative after tabling a substantial offer.

Confirming last month that it had slumped into the red during the year to June, Murray Goulburn also revealed it had fielded buyout bids and offers for some of its assets.

A buyout by an offshore group such as Yili would face scrutiny from the Foreign Investment Review Board.

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Murray Goulburn chief executive Ari Mervis. Picture: Aaron Francis

Industry experts say any deal would likely need the backing of 90 per cent of Murray Goulburn’s farmer suppliers under its co-op structure. As such, the government would be less likely to overturn a deal even if the review board had concerns, they say.

Other bidders are said to include listed company Bega Cheese, Chinese group Fuyuan Farming, New Zealand dairy processing titan Fonterra and Canadian heavyweight Saputo, which already owns Warrnambool Cheese and Butter.

Italian dairy titan Parmalat, Japan’s Lion, Singapore-owned Goodman Fielder and New Zealand’s A2 Milk — which is listed on the Australian Securities Exchange — are also said to be among those courting Murray Goulburn.

At its results announcement last month, Murray Goulburn chief Ari Mervis said the company had hired Deutsche Bank to seek more detailed proposals from suitors “to assess the merits of such proposals”.

In the year to June, Murray Goulburn suffered a net loss of $370.8 million, compared with a $39.8 million profit a year earlier.

Units in Murray Goulburn’s listed entity, the MG Unit Trust, rose 3.3 per cent, or 2.5c, yesterday to 77.5c.

Source: http://www.heraldsun.com.au/business/chinese-dairy-company-yili-makes-substantial-murray-goulburn-offer/news-story/94ba748f25bf2f6a2bdab9560ff075be

One Comment Add yours

  1. Sale of such assets to any forge in country that does not reciprocate in terms of allowing Australias to make similar purchases in their country should not be allowed. When the Chinese own all our power, natural resources and agriculture what will Australians be left with and what will we do to survive?

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