Saputo Inc., a Canadian dairy firm, has reportedly been seeking the approval of the Australian Competition and Consumer Commission (ACCC) for taking over Murray Goulburn’s Koroit dairy processing unit based in Victoria. The acquisition amount has been evaluated at nearly USD 1.3 billion.
According to some of the key officials at Saputo, the firm has already commenced talks with ACCC regarding the acquisition deal. Last week, the ACCC had expressed concerns over the pact stating that it could result in the region’s dairy business being monopolized. The Australian authority also announced that the integration of Saputo’s Allansford unit and Murray’s Koroit dairy farm may also reduce the competition across the milk processing sector of the region.
The firm has stated that it had commenced the discussions with ACCC for addressing the concerns regarding Koroit’s takeover and obtaining the clearance from the Australian authorities. Apart from signing on a divestment deal with Murray, the Canadian firm is also thinking of acquiring 70% of stake in Murray without Koroit and face a legal dispute with ACCC or file the litigation with the Australian Competition Tribunal. Industry analysts claim that the selling price of Koroit, which was able to process 800 million liters of milk a year over the last few years, has included numbers up to USD 300 million.
The ACCC has apparently invited proposals from various firms seeking to acquire Koroit after Saputo made a bid to purchase it from Murray. They have also speculated that the final decision on the takeover bid is likely to be declared on March 29th this year. Murray Goulburn has also announced that it is working closely with Saputo and ACCC to seek the approval for selling its dairy processing unit to the former. The agreement however, will also require the green signal from the foreign investment review board.