Dairy co-op’s Aussie exit
AUSTRALIA’S biggest milk processor Murray Goulburn is set to fall into foreign hands after striking a deal to be taken over by a Canadian dairy giant.
Melbourne-based Murray Goulburn yesterday announced it would sell its assets to Canada’s Saputo for $1.31 billion.
Chairman John Spark said the sale to Saputo was the best option for all stakeholders given the co-operative’s high debt level and a significant loss of milk suppliers over the past 18 months.
“The economic position we find ourselves in is pretty tenuous and the board has had to make a decision that offers benefit to everyone at a stage when we have value in the business,” he told the co-operative’s general meeting in Melbourne yesterday.
Farmers have walked away from the dairy co-operative since it slashed the price it was paying for milk in April 2016 and tried to claw back past payments.
Saputo, which owns Warrnambool Cheese and Butter, will emerge as the nation’s biggest milk processor accounting for three billion of the nine billion litres farmers produce annually.
The deal must be approved by 50.1 per cent of Murray Goulburn unit holders as well as the Australian Competition and Consumer Commission and Foreign Investment Review Board.
Murray Goulburn said it expects unit holders will receive between $1.10 and $1.15 a share.
If the deal is cleared it ex- pects to make a 75c per unit distribution in the first half of next year.
It will keep the remaining cash until an investigation by the corporate cop and separate class action has been settled.
Dairy farmers vented their anger at Murray Goulburn’s poor performance at its general meeting yesterday.
Farmer Brad Adams received a round of applause when he said the board’s older members had been part of a management team that had ruined “a truly magnificent Australian company”.
He also said current management had not done enough to retain suppliers and reinstall trust among farmers.
“The things you guys have been paid big money to do, you have failed to do,” he told directors.