The company aims to acquire New Zealand dairy giant Fonterra’s operations in Oceania, which includes Australia, as part of a strategy announced last year to divest these assets along with local operations and those in Sri Lanka. Fonterra seeks to concentrate on dairy ingredients and the foodservice channel.
The planned divestitures align with Fonterra’s strategy to exit consumer-facing operations. Last November, the cooperative confirmed it would explore options for a complete or partial sale or an IPO.
Fonterra Oceania encompasses operations in New Zealand and Australia, serving retail, out-of-home, and B2B channels. Bega Group expressed confidence, stating, “if it were to be included in the sale process and the successful acquirer of the Oceania assets, it would significantly enhance outcomes for the company and the dairy industry as a whole, particularly in Australia.”
The company further emphasized: “The combination of the Fonterra and Bega Group assets in Australia would lead to greater efficiencies and enhanced outcomes for Australian farmers, customers, and consumers.”
However, Bega Group will face competition from other potential buyers, including Lactalis, a leading dairy giant based in France.
The ACCC revealed in May that it had received a proposal from Lactalis to secure Fonterra’s global consumer business and the cooperative’s dairy and ingredients foodservice businesses in Australia.
There have also been speculations, though unconfirmed, about other interested parties including Canada’s Saputo, Japan’s Meiji Holding Co., and US investment firm Warburg Pincus regarding Fonterra’s available assets.
Bega Group reiterated its commitment today, stating that it will “work constructively with Fonterra Group on the sale of its Oceania businesses of which Bega Group is the natural acquirer and in which it remains very interested.”
Headquartered in Bega, New South Wales, Bega Group has a diverse portfolio that includes renowned brands such as Vegemite spreads, Bega Peanut Butter, and Dairy Farmers milk.
Notably, first-half results disclosed in February reflected a 3% revenue increase, reaching A$1.8bn ($1.17bn). Furthermore, normalized EBITDA surged 44% to A$110.3m, while net profit after tax skyrocketed to A$35.9m from A$13.3m a year prior.