After acquiring a majority stake in Warrnambool Cheese and Butter (WCB) in January 2014 after a lengthy bidding war with Murray Goulburn and Bega Cheese, Canada-based Saputo signaled it was prepared to expand upon its presence in Australia. Toward that end, Saputo-owned Warrnambool Cheese and Butter (WCB) has announced it has acquired the ‘everyday cheese’ business of its rival Lion Dairy and Drinks for A$137.5 million (US$107 million).
The Lion Dairy and Drinks business generates revenues of A$160 million (US$124.5 million) per year and carries with it control of major brands of cheese including Coon, Mil Lel, and Cracker Barrel, increasing Warrnambool Cheese and Butter’s presence in the retail branded cheese products segment in Australia.
Lion Dairy and Drinks plans to roll the funds from the sale into its ‘turnaround strategy’ focused on growth in high-value categories including specialty yogurts, cheeses, and milk-based beverages.
The deal is subject to approval by WCB shareholders, however no opposition is expected and is scheduled to be completed in late April or early May of this year.
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