Warrnambool in Cracker of a deal

WARRNAMBOOL Cheese and Butter Factory is set to acquire some popular cheese brands, including Coon.

The company said yesterday it had agreed to acquire the everyday cheese business of Lion Dairy and Drinks for $137.5 million.

The operations of the everyday cheese business include the cutting and wrapping, distribution, and sales and marketing of the Coon, Cracker Barrel, Mil Lel and Fred Walker brands.

“The transaction will enable Warrnambool Cheese and Butter to increase its presence in consumerbranded everyday cheese products segment in Australia, with strong market positions in this segment,” the firm said.

The sector of the business generates annual sales of about $160 million.

Lion Dairy and Drinks said the everyday cheese business was performing well in the market, but Lion wanted to focus on higher-value categories such as milk-based beverages, specialty cheese and yoghurt.

The cut-and-wrap operations are located in a building owned by Warrnambool, which is next to its cheesemaking facility at Allansford in Victoria.

Lion said Warrnambool had indicated that it would run the cut-and-wrap facility as a going concern and retain all staff.

The acquisition is subject to approval by Warrnambool shareholders under sharemarket listing rules on related party transactions.

Lion holds a little more than 10 per cent of the shares of Warrnambool Cheese and Butter.

Canadian dairy giant Saputo holds a stake of 87.92 per cent of Warrnambool shares.

Warrnambool said Saputo had advised it would vote in favour of the acquisition.

AAP