The Australian Competition and Consumer Commission is reviewing Saputo Dairy Australia’s proposed acquisition of Lion Dairy & Drinks.
Saputo proposes to acquire Lion D&D, including its ten dairy processing plants, various retail brands like Big M, Farmers Union, and Dairy Farmers, and other assets in Australia.
There has been much conjecture about the future of D&D after its sale to China Mengniu Dairy Company failed to secure a response from the Foreign Investment Review Board.
When that deal was initially reported, federal treasurer Josh Frydenberg said it was not in the national interest.
Lion D&D and Saputo both operate dairy processing plants and purchase raw milk from dairy farmers and milk brokers. They also supply dairy products to retailers. In April last year Saputo acquired Lion Dairy & Drinks’ speciality cheese business for $280 million on a cash-free and debt-free basis. It would see Saputo acquire Lion’s Tasmanian cheese processing plants, located in Burnie and King Island, as well as Lion’s cheese brands, including South Cape, King Island Dairy and Tasmanian Heritage, worth $192 million in revenue.
The ACCC had concerns about that deal but ultimately found it would not reduce competition.
Saputo also completed a $1 billion takeover of Murray Goulburn and Warrnambool Cheese & Butter (WCB) in 2019, making the company the largest dairy processor in Australia.
Submissions closed on 5 November. The ACCC will announce its findings on 23 December.
