GREEN LIGHT TIPPED FOR MG DEAL
THE future for Tasmania’s Murray Goulburn suppliers is now looking more certain after shareholders and Australia’s competition watchdog gave Saputo final approval to buy the embattled co-operative.
On Wednesday, the Australian Competition and Consumer Commission said it was giving approval for the $1.3 billion takeover deal to go ahead.
Yesterday MG shareholders also gave the Saputo deal the green light at an extraordinary general meeting held in Meldivest bourne, with 98 per cent voting in favour.
However, the deal must still gain approval by the Foreign Investment Review Board.
If it does, the sale is expected to be completed by May 1.
Tasmanian Farmers and Graziers Association dairy councilk chairman Andrew Lester said the deal would be good for MG suppliers.
In a statement, the ACCC said it would not oppose Canadian giant Saputo’s proposed acquisition of Murray Goulburn’s assets after it accepted an undertaking from Saputo to the Koroit plant in Victoria.
Saputo already owns the Warrnambool Cheese and Butter factory in the same region of southwestern Victoria.
The ACCC had previously raised concerns about a possible lack of competition for farmers’ milk if Saputo were to operate both of the region’s two largest milk processors.
In response to the ACCC’s concerns, Saputo offered a legally enforceable undertaking that it would divest the Koroit plant. It will be sold within a specified period to a buyer which will need to be approved by the commission.
ACCC chairman Rod Sims said Saputo’s undertaking had remedied concerns about the Koroit plant.
“The undertaking creates an opportunity for a viable competing milk processor to enter or expand in the local region,” he said.
“When approving a new owner of Koroit, we will focus on its ability to be a strong and effective competitor for raw milk in the region.”
In Tasmania, about 17 per cent of the state’s milk is supplied to MG and processed at the company's Smithton factory.
Mr Lester said most of the co-operative’s Tasmanian suppliers would see the sale of assets to Saputo as a positive move.
“They’ve been operating Warrnambool Cheese and Butter for a while now and they’ve demonstrated through that they’re a reputable company,” he said.
“They’ve also worked with the industry on issues like animal welfare and I think this sale shows they want to be a key player in the Australian industry over the long term.”
Mr Lester said the purchase should also help improve competition for milk in the NorthWest of the state.
This sale shows Saputo wants to be a key player in the Australian industry over the long term