Beston Global Food Co. has indicated that it may be nearing the conclusion of a deal concerning its dairy and dairy nutrition segment with an undisclosed entity.
The Australian company had announced in July that discussions were underway with potential suitors regarding a “number of proposals.” As of today (16 August), Beston confirmed that negotiations have advanced to a stage where a deal could materialize soon.
“Discussions and due diligence have now progressed with a major international dairy company, which specializes in dairy nutraceuticals and functional ingredients, and is globally recognized as a leader in this sector,” Beston stated in a filing to the Australian Securities Exchange.
Further, Beston has been informed that a binding proposal regarding a commercial arrangement with the company will be received on or before 9 September 2024. While this signals progress in the food and beverage industry trends, it’s important to note that Beston’s shares are currently suspended from trading in Australia, meaning the proposal is “not as yet in a form capable of acceptance.”</p>
Additionally, Beston has finalized the sale of its meat business, Provincial Food Group (PFG). In July, the company announced the subsidiary would be sold for A$4m ($2.6m) to a consortium of six firms led by Milne Bay, located in Victoria. This private group comprises trusts and a superannuation fund with a solid background in the meat-processing industry.
Proceeds from this transaction are intended to alleviate some of Beston’s debt, as previously indicated. Notably, the company announced last month that its bankers had agreed to extend debt obligation deadlines from 31 July to 30 September.
In light of various corporate actions, Beston noted it has been presented with several non-binding indicative offers in recent months regarding debt refinancing and equity solutions related to its core business in dairy and dairy nutrition. This development underscores the active shifts within the food and drink business landscape.
Beston, facing financial challenges due to a rebound in Australian milk production—marking the lowest output seen in 30 years—has also grappled with competition from unprecedented levels of dairy imports into Australia throughout 2023 and early 2024. These dynamics continue to impact the food and drink consumer trends, creating substantial competition across retail, bulk ingredients, and foodservice channels.
