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Bega Cheese chalks another win

Two weeks after Bega Cheese claimed victory in its long-running peanut butter war with Kraft Heinz, the Aussie "dairy" company has surged, following news it will acquire Lion Dairy & Drink, in a $534 million deal from Japanese company Kirin.


Bega will fund the deal through a combination of new and extended debt facilities, along with the proceeds from a $401 million capital raising, at an offer price of $4.60.


LD&D’s core business is the manufacture, marketing, sales and distribution of five product groups, across several major brands including:

  • Milk Based Beverages (Dare, Farmers Union, Big M, Masters, Dairy Farmers);

  • Yoghurt (Yoplait, Farmers Union, Dairy Farmers);

  • Chilled Juices (Juice Brothers, Daily Juice);

  • Cream and Custard (Pura, Dairy Farmers); and

  • White Milk (Pura, Dairy Farmers, Masters).


The combined business is expected to generate revenue in excess of $3 billion and double-digit EPS accretion in FY22. The company hopes to achieve base case synergies of $41 million per annum primarily from milk network optimisation, indirect procurement and a corporate reorganisation. While additional initiatives and synergies are also expected to support strong deleveraging going forward.


Last year, Chinese company Mengniu Dairy, tried to purchase the business for $600 million. While the deal was not opposed by the Australian Competition & Consumer Commission, it was rejected by Treasurer Josh Frydenberg "on national interest grounds".