The Australian Competition and Consumer Commission (ACCC) has given Australian dairy company Bega (ASX: BGA) the go-ahead to acquire a $250 million dairy processing plant in Koroit, Western Victoria.
The facility managed by Saputo Dairy Australia (SDA) currently processes milk into bulk and retail butter, commodity and retail milk powders and growing up milk powder.
Part of Canadian conglomerate Saputo, SDA is responsible for well-known cheese brands such as Coon, Cracker Barrel, Devondale and Warrnambool Cheese & Butter.
Bega has also entered into a Transition Services Agreement and a Milk Supply Guarantee Agreement with SDA whereby SDA is required to guarantee supply milk until 30 June 2020.
The 180 employees currently working at Koroit will become employees of Bega.
Bega expects the Koroit facility to generate annualised earnings of $20 million provided production continues at current levels.
The integration of the Koroit facility into Bega's core business could take until FY21 to complete.
Business News Australia
Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support