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Purchase: National Foods is set to acquire Dairy Farmers for $910m

Purchase: National Foods is set to acquire Dairy Farmers for $910m

Japanese beverage giant Kirin Holdings has confirmed that its Australian subsidiary National Foods has been named the successful bidder to acquire all the shares of Australian Co-operative Foods Limited (ACF), which trades as Dairy Farmers for a cash consideration of $5.65 per share.

This equates to an enterprise value of $910 million. However, the sale agreement is subject to the approval of at least 75 per cent of DF shareholders, which is expected to take around three months.

National Foods will work closely with Dairy Farmers to explain the acquisition proposal and seek the necessary approval from Dairy Farmers’ shareholders. National Foods and Warrnambool Cheese and Butter Factory (Allansford, Australia) are also in discussions to finalise the details of a joint venture that will operate the acquired cheese business after completion of the transaction.

Kirin says its long-term group vision, is to be a leading company in Asia and Oceania, and Kirin has been promoting a strategy in these regions of focusing on profitable operations in the area of food and health.

Dairy Farmers, a co-operative consisting of approximately 2,000 farmer members, is the second-largest manufacturer in Australia of fresh dairy products for retail customers, after National Foods

Ashley Waugh, managing director of National Foods says the successful acquisition of Dairy Farmers would result in the most respected portfolio of dairy brands in Australia.

He says, “National Foods has the capability and financial strength to leverage the acquisition of Dairy Farmers to create new business opportunities domestically and in the vitally important Asian region – providing suppliers with secure and growing demand for their milk.”

Principal activities of Dairy Farmers include the production and distribution of milk, cheese, yogurt and other fresh dairy products. Through this acquisition, National Foods is aiming to improve profitability through the stable procurement of raw milk, expand its distribution channels, and further develop a strong brand portfolio covering all categories of fresh dairy products.

National foods claims it is also aiming to achieve continued growth by realising opportunities for synergies in all areas, from procurement and manufacturing through to distribution.