Bega launches takeover bid for WCB

Bega Cheese has launched a takeover offer for Warrnambool Cheese and Butter (WCB) which, if successful, will make the merged entity one of Australia's largest publicly listed food companies.

According to Bega executive chairman, Barry Irvin, the combined business would operate over seven sites, produce 353,000 tonnes of dairy products, generate revenue of $1.5 billion, and process approximately 1.6 billion litres of milk from approximately 1000 Australian dairy farmers.

Bega Cheese, which currently owns 18 per cent of Warrnambool Cheese, is offering 1.2 Bega shares and $2.00 cash for every WCB share as part of the off-market takeover offer. If successful, the combined entity will have a market capitalisation of around $650 million.

“The benefits for each company's shareholders, many of whom are farmer supplier shareholders, are highly attractive. Both groups of shareholders will access the synergies that can be realised by a successful merger, which we estimate will be $7.5 million per annum," Irvin said.

"Customers, dairy farmer suppliers and employees will also benefit from being associated with a larger, more diversified organisation, an enhanced market position and a scale that is globally relevant.”