Saputo Eyes Assets Sale To Allay ACCC Concerns
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Well, that was no surprise. Saputo, the Canadian dairy hoping to buy Australian co-operative Murray Goulburn, is now looking to sell the dairy factory in southwestern Victoria that is a sticking point to ACCC approval for the $1.1 billion deal.
The ACCC revealed the problem in a statement of issues on the Saputo bid last Thursday. The Commission said Saputo’s acquisition of the facility would substantially lessen competition for milk produced in western Victoria.
It was then very easy to predict that Saputo would look for buyers or a buyer to take the problem out of the equation.
The Murray Goulburn plant is in the town of Koroit near Warrnambool, only about 30 kilometres away from Warrnambool Cheese and Butter's plant at Allansford. Saputo is the owner of Warrnambool Cheese and Butter (so it is out as a buyer).
Kiwi giant, Fonterra is also out because it has a plant in the area.
In a statement to the ASX on Monday Saputo said it had Saputo said it had “ initiated discussions with the ACCC in respect of a divestment plan for the Koroit dairy plant in order to address the ACCC concerns and to obtain the ACCC clearance".
ACCC chairman Rod Sims said last week the watchdog was concerned that the inclusion of the Koroit plant in the deal “could ultimately lead to lower prices being paid to dairy farmers in the region’', leaving them "worse off".
Now to find a buyer and the deal will done and the total cost lowered by the value received for the plant to be sold.
Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.
At the AFR he was a finance writer, Finance Editor, News Editor and Chief of Staff. At the Nine Network he was supervising producer of Business Sunday for more than 16 years. He has also written for other online and analogue print publications here and overseas.