The 130-year-old dairy processor Brownes has been sold to a consortium led by Shanghai Ground Food Tech.
The company was formerly owned by Fonterra, but was bought by private equity firm Archer Capital in 2011, which last year began the search for a buyer in order to exit its investment.
The acquisition will enable the company to “move forward with plans to advance growth domestically and pursue greater export opportunities” according to Brownes.
Brownes manufacturers Brownes- and Chill-branded white and flavoured milk, yoghurt, creams, custards, dairy desserts, juices and cheese.
The company has been rationalised in recent years, including centralising its processing operations into a single facility in Balcatta, Perth, to boost its profitability.
The acquisition by Australia Zhiran is backed by a Consortium of Chinese investors including investment firm Changchun Lianxin Investment Consulting Company and experienced dairy operator Shanghai Ground Food Tech.
The deal would see Brownes remain an “integral part of the WA dairy industry for generations to come, while creating access to emerging overseas markets and the potential for new product development”, according to the company.
Shanghai Ground Food Tech is a well established dairy company publicly listed on the Shanghai Stock Exchange, and its Chinese dairy operations focus on liquid milk and cheese products. It has four dairy processing factories, and is also one of the country’s largest cheese manufacturers.
Brownes will retain its current management, including current managing director Tony Girgis, who described the announcement as a “defining moment for the future of WA’s oldest dairy as it looked to continue producing some of the highest quality dairy products anywhere in the world”.
“As it has done for 130 years, Brownes will remain an important part of the WA community and continue to contribute to the sustainability of the local dairy industry,” Girgis said.
Girgis said the deal would pave the way for Brownes to develop new product lines and access emerging export markets, particularly in Asia.
“Not only will we seek to expand into new products such as cheese, but we will also be better positioned to take advantage of export opportunities and promote the WA dairy industry to a much wider audience.
“Day-to-day there will be no disruption to our employees and suppliers and we expect to be able to make more positive announcements in the near future.
"Furthermore, the decision to retain Brownes’ management provides ongoing structural certainty and is a vote of confidence in the business’s current position and its future direction,” Girgis said.
The transaction is unconditional and is expected to complete in the coming weeks.