With the path clearer for the sale of Murray Goulburn (MG) to Canadian dairy giant Saputo, potential bidders for MG’s Koroit plant are firming up their plans.
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Saputo has agreed to sell off the Koroit plant after it acquires it in order to appease the Australian Competition and Consumer Commission.
The ACCC was concerned Saputo would have too much control of the regional milk market if it was able to add MG’s Koroit plant to its other regional plant at Warrnambool Cheese and Butter.
The path to MG’s sale became clearer on Thursday after MG supplier shareholders voted overwhelmingly to accept Saputo $1.3 billion offer for the whole cooperative.
The list of potential bidders for MG’s Koroit plant has narrowed with the Union Dairy Company (UDC) saying it’s unlikely to bid for the plant, which is MG’s biggest.
UDC is a joint venture between the Warrnambool-based Midfield Group and the global Louis Dreyfus agribusiness company.
Midfield managing director Colin McKenna has told ABC News he did not think UDC would make a bid at this stage.
UDC last year opened a milk processing factory in Penola, which draws milk from western Victoria and south-eastern South Australia.
Bega Cheese earlier this year expressed an interest in the Koroit plant but no one was available to comment on Friday on whether it intended to pursue that interest.
Bega Cheese was drawing about 100 million litres of milk from the south-west, as of March last year.
Other bids could come from companies rumoured to have been interested last year in buying all of MG, which included China’s Yili Industrial Group, the French-owned Parmalat and Lactalis and the Asian-owned Goodman Fielder group.
On other outcomes from Thursday’s meeting of MG supplier shareholders, suppliers agreed to accept an initial distribution of 80 cents a share or unit within 10 business days of the sale to Saputo being concluded.
Suppliers were told a 40c a kilogram/milk solids (kgms) step up in milk price would be applied from July 1 to October 31, last year if the sale was concluded.
That step up will add to the 40c kgms price step up that MG has already announced for milk supplied from November 1.
An additional 40c kgms loyalty payment will mean that suppliers will be paid an average price of $6 kgms.
