BEGA PAYS $460 MILLION FOR VEGEMITE TO BRING THE ICONIC BRAND BACK UNDER AUSTRALIAN OWNERSHIP

BEGA PAYS $460 MILLION FOR VEGEMITE TO BRING THE ICONIC BRAND BACK UNDER AUSTRALIAN OWNERSHIP
VEGEMITE is back under Australian ownership after Bega Cheese (ASX: BGA) agreed to buy Mondelez International's Australia and New Zealand grocery and cheese business for $460 million.

The business includes brands such as Vegemite, ZoOSh and Bonox and KRAFT-branded products such as peanut butter, processed cheese slices, mayonnaise, parmesan cheese, KRAFT Easy Mac and KRAFT Mac & Cheese, as well as the Port Melbourne manufacturing site.

Philadelphia is not included in the sale.

Bega, which is trading up 11 per cent at $4.99 this morning, will fund the purchase through bank debt, but says it has "near term corporate opportunities" to pay it down.

It estimates the Mondelez business will generate pro-forma net revenues of around $310 million and EBITDA of $40-$45 million in its first full year of operation.

Bega Cheese executive chairman, Barry Irvin, says, "The wonderful heritage and values that Vegemite represents and its importance to Australian culture makes its combination with Bega Cheese truly exciting.

"This acquisition will be value accretive in its own right, strategically important and company making. These iconic brands alongside the Bega brand are strong building blocks to enable Bega Cheese to become a great consumer goods business."

Irvin adds that the business brings a group of talented new staff to Bega.

"We look forward to welcoming the new employees to Bega Cheese and are excited about the opportunities which will be created by bringint them and the MDLZ Grocery Business together with Bega Cheese," he says.

As part of the deal, Bega Cheese gains the global trademark rights to Vegemite and ZoOSh, a transitional royalty free trademark licence for several KRAFT branded products, including peanut butter and processed cheese until December 2017 and a licence for the Dairylea and Snackabouts brands together with inventory, property, plant and equipment and employee entitlements.

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