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Splitting the glass-and-a-half

Dairy cooperative Dairy Farmers would be split in two if Parmalat and Murray Goulburn take over the business.

According to a letter released by the Australian Competition and Consumer Commission to market participants, the Parmalat-Murray Goulburn consortium’s proposed transaction would result in two separate dairy businesses, each with its own particular dairy industry focus and each separately controlled.

While no precise details were disclosed, one company, to be called Fresh Dairy Co. would see the merging of the fresh milk operations of all three companies, and control about 50% of Australia’s branded liquid milk sales.

Parmalat would hold a 51% stake in Fresh Dairy, with Murray Goulburn holding 49%.

Meanwhile, Murray Goulburn would acquire the non-fresh dairy operations of Dairy Farmers, including cheese, UHT milk and milk powder.

Dairy Farmers has also attracted firm offers from National Foods and Fonterra. All bidders are currently awaiting ACCC approval.

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