Kirin Holdings and Lion have announced an agreement to sell the Dairy & Drinks business to Bega Cheese for A $560 million. The sale is unconditional, including no further regulatory approvals required and is expected to be completed in early 2021.
Beverage giant Lion and China-based Mengniu Dairy have agreed to part ways on the $600 million deal that was supposed to have the Chinese company take over brands such as Pura milk, Dare iced coffee and Yoplait yoghurt.
The sale was abandoned after federal treasurer Josh Frydenberg made it clear that the Foreign Review Board was unlikely to approve of the sale. “contrary to the national interest”.
The sale was announced last November, but soon caught the eye of government regulators, who Frydenberg said and found that the sale was contrary to national interests.
It comes on the back of several similar issues including China imposing tariffs on Australian barley, and starting an investigation of alleged dumping cheap Australian wine onto the Chinese market.
Lion realeased a statement stating the deal was no longer viable.
“Lion notes that China Mengniu Dairy Company Limited has been awaiting the outcome of the Foreign Investment Review Board review of its proposed purchase of Lion Dairy & Drinks,” the statement said.
“Given this approval is unlikely to be forthcoming at this time, Lion and Mengniu Dairy have mutually agreed to cease the current sale process.
“We are disappointed with this outcome and will now consider pathways forward in relation to the Lion Dairy & Drinks business.”
Orkla, Pernod Ricard, Nestlé, Asahi, PepsiCo, Lactalis, Anheuser-Busch InBev, Azelis, Berlin Packaging, Kirin and Waterlogic were the most acquisitive companies of 2019, according to the bevblog.net food and drink transactions database, with each responsible for five or more takeovers. Archer Daniels Midland, Bimbo, Diageo, Emmi, JBS and Refresco all made four purchases.
Campbell Soup was the only company to agree five or more sales, followed by Fonterra on four, then Coca-Cola, Hain Celestial and Nestlé on three.
A total of 1,290 companies were involved across 59 countries, with the United States and United Kingdom most prominent overall.
Global food and drink transactions by country 2018-19
Japan was the biggest net buyer (+18), followed by France (+10), then Belgium and Norway (+9 each).
The United Kingdom was the main net seller (-37), followed by the United States (-23), Australia (-16) and Brazil (-11).