Murray Goulburn sold to Canadian – owned Saputo for $1.3 billion

CANADIAN family dairy company Saputo Inc has won the battle for Victorian-based dairy co-operative Murray Goulburn.

Murray Goulburn has announced it has entered into a binding agreement to sell to Saputo Dairy Australia Pty Ltd, the Australian arm of the Canadian dairy giant, for $1.3 billion.

The deal is subject to approval from the Foreign Investment Review Board and the Australian Competition and Consumer Commission.

MG chairman John Spark said the weight of debt and significant loss of milk to competitors had forced MG’s hand.

The sale includes all of MG’s assets and operating liabilities.

The $1.3-billion price is equivalent to a net value of $1.10 to $1.15 a share, or listed unit.

Shareholders and unit holders are expected to be paid an initial distribution of 75 cents a share, or listed unit, after the sale is completed in the first half of next year.

MG said unit trust holders will be treated equally with the co-operative’s shareholders.

MG’s shares, or listed units, traded on the Australian Securities Exchange closed at 83 cents yesterday.

In the first half hour of trading on the ASX today, the price of MG shares, or listed units, jumped to 87c.

The deal is subject to approval from the Foreign Investment Review Board and the Australian Competition and Consumer Commission.

Saputo bought Warrnambool Cheese and Butter in January 2014.

It may be required by the ACCC to dispose of MG’s Koroit dairy factory if the deal is approved.

The agreement means Saputo will take on all MG’s milk supply commitments totalling $114 million.

The co-operative said this would enable a step-up of 40 cents a kilogram of milk solids, taking full-year payments to $5.60/kgMS for milk supplied from November 1 and, on completion of the sale deal, back pay from July to October this year.

On top of that existing suppliers would receive a 40c/kgMS loyalty payment.

The deal comes as dairy farmers descend on Melbourne for MG’s annual general meeting at the Melbourne Convention and Exhibition Centre at 11am.

It is likely to result in spirited debate at the AGM.

Mr Spark said the co-operative’s board believed the transaction represented “the best available outcome” for suppliers and investors.

He said it had the unanimous support of the co-operative’s board.

“Saputo is one of the top 10 dairy processors in the world and active in Australia through its ownership of Warrnambool Cheese and Butter,” he said.

“This transaction will crystallise real value for MG’s equity, while rewarding our loyal suppliers through the milk supply commitments.

“Securing a sustainable future for MG’s loyal suppliers is of paramount importance to the board.

“We are pleased with the strong milk commitments secured as part of Saputo’s offer to reward this loyalty.

“Saputo has demonstrated itself to be a credible and trusted partner for Australian dairy farmers through its investment in WCB.”


3 Comments Add yours

  1. Bruce marshall says:

    When are you going to stop the sell off to foreign investors, when we have nothing left to sell wake up I am worried what my children are going to eat when they are older. You don’t care about your own people one bit. I am sick to death of it


  2. louisr says:

    It is about time Politicians took this country seriously. .we have enough rescources hear to look after ourselves stop selling of our future


  3. louisr says:

    Look aftrr our future generations. .


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