Fonterra a suitor for dairy rival

NEW Zealand dairy titan Fonterra has confirmed it has made a bid for Australia’s biggest dairy processor, Murray Goulburn Co-operative.

Investment bank Deutsche had called for first-round bids for Melbourne-based Murray Goulburn by Friday, September 15.

Fonterra Australia managing director Rene Dedoncker yesterday acknowledged the group was a bidder.

“The answer is yes, we have put forward a proposal,” Mr Dedoncker told ABC radio.

“It’s non-binding and indicative, and we are going to sit tight and give the MG board the respect they deserve to consider all proposals.”

It was reported last week many dairy groups were believed to have made offers for Murray Goulburn.

The interested parties include A2 Milk, Fonterra, Saputo, Parmalat and Bega Cheese.

Also among them was Chinese dairy powerhouse Yili, which was said to have made a significant bid.

Mr Dedoncker was speaking after Fonterra yesterday reported an 11 per cent fall in full-year profit.

He would not elaborate on details of Fonterra’s bid but said a combined Murray Goulburn and Fonterra could work well.

“In many respects, we’re not that different,” he said.

“When they [the Murray Goulburn board] are ready to talk, we will be there and at some point when the boards are aligned, there may be news.”

Combining Fonterra and Murray Goulburn would create a milk processor that could collect between 40 per cent and 50 per cent of the milk produced in Australia, posing competition issues.

Murray Goulburn hired investment bank Deutsche to embark on a strategic review in recent months after farmers started deserting the company to other suppliers.