Bega Cheese set to acquire Lion Dairy & Drinks

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Bega Cheese Limited has reached an agreement to acquire all of the shares in Lion Dairy & Drinks (LD&D).

Bega said the $534 million deal would be funded by a combination of new and extended debt facilities and the proceeds from a $401 million underwritten entitlement offer and placement.

LD&D’s core business is the manufacture, marketing, sales and distribution of milk based beverages (Dare, Farmers Union, Big M, Masters, Dairy Farmers); yoghurt (Yoplait, Farmers Union, Dairy Farmers); chilled juices (Juice Brothers, Daily Juice); cream and custard (Pura, Dairy Farmers); and white milk (Pura, Dairy Farmers, Masters).

The company has a national manufacturing footprint comprising 13 sites, as well as significant joint ventures and alliances with companies such as Sodima and Vita International Holdings.

LD&D also has a longstanding joint venture with Bega Cheese, in relation to Capitol Chilled Foods CCFA, an ACT company that manufactures dairy products in the ACT and distributes and sells those and other products under the LD&D brands and Canberra Milk brand.

Bega said the combined business is expected to generate revenue in excess of $3 billion, creating a large-scale dairy and foods business with increased product portfolio.

Bega Cheese’s Executive Chairman, Barry Irvin, said the acquisition would create significant value for shareholders.

“The acquisition delivers important industry consolidation and value creation with synergies across the entire supply chain,” he continued.

“The expanded product range, manufacturing and distribution infrastructure and brand portfolio realises our ambition of creating a truly great Australian food company.”

Bega Cheese’s CEO, Paul van Heerwaarden, added: “We are very pleased with the performance of acquisitions made in recent years which are achieving or exceeding our profit targets.

“The recent company restructure and ERP implementation will allow us to integrate this Acquisition and take advantage of the various synergies and growth opportunities across domestic and international markets.”

According to Bega, completion of the acquisition is anticipated to occur at the end of January 2021.

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