HOUSEHOLD brands Cracker Barrel and Coon cheeses are set to be taken over by Warrnambool Cheese and Butter (WCB) as part of a $137.5 million deal.
Subscribe now for unlimited access.
$0/
(min cost $0)
or signup to continue reading
The Allansford processor announced it will buy the cheese business of Lion Dairy, a company which owns a significant share in the Saputo-controlled WCB.
WCB management said the acquisition, expected to be finalised in May 2015, will allow it to increase it presence in the domestic branded cheese market.
Warrnambool will assume ownership of Lion's everyday cheese brands, which include Coon, Mil Lel and Cracker Barrel, and will also take control of Lion's cut and wrap facility in Victoria.
Lion still holds a 10.22 per cent in WCB, one of the few significant shareholders to hold on to shares in the hotly contested takeover tussle for the Victorian business last year.
The Lion buyout requires shareholder approval, which Saputo has recommended.
WCB chief executive David Lord last month warned suppliers that market returns for its products would remain considerably lower than envisaged earlier in the season.
“We may not see real improvement in commodity prices in the short term, however the continuing weakening of the Australian dollar is likely to have a positive impact,” Mr Lord wrote in a letter to suppliers on February 2.
WCB has maintained its supplier milk price at the opening average price of $5.86 per kilogram milk solids.
Saputo president and chief operating officer Kai Bockman will take over as WCB chief executive when Mr Lord retires next month.