China Mengniu Dairy will purchase Lion Dairy & Drinks’ all white milk, milk-based beverages, yogurt, juice and water ice brands and assets
Image: Kirin intends to maximise growth potential with the sale of Lion Dairy & Drinks business. Photo: courtesy of LION.
China Mengniu Dairy has signed an agreement to acquire Kirin Holdings Company’s Australian beverage unit Lion Dairy & Drinks for A$600m ($407m).
Under the terms of the deal, China Mengniu Dairy will purchase Lion Dairy & Drinks’ all white milk, milk-based beverages, yoghurt, juice and water ice brands and assets.
The assets being acquired by China Mengniu Dairy also includes Lion Dairy & Drinks’ International business, and share of the joint ventures Vitasoy Australia Products and Capitol Chilled Foods Australia, as well as Dairy & Drinks’ licensing agreement for the Yoplait brand.
Kirin seeks to maximise growth potential
Kirin considers the sale of Lion Dairy & Drinks business to be the best option to maximise its growth potential.
The sale is subject to approvals from the Australian Competition and Consumer Commission (ACCC) and Foreign Investment Review Board as well as other standard closing conditions.
Lion CEO Stuart Irvine said: “After reaching an agreement to sell the Specialty Cheese business to Saputo on a standalone basis, we took some time to carefully assess all options for the balance of the Dairy & Drinks business that would best deliver on our objectives.
“We believe that Mengniu Dairy, a speciality dairy player, is an ideal owner to take Dairy & Drinks forward, given its track record of investing in the Australian dairy industry, together with its global reach and deep capabilities.
“Bringing the businesses together will help drive Mengniu Dairy’s growth in the Australian domestic market, while also accelerating Dairy & Drinks’ aspirations in South East Asia and China.
“In addition, Dairy & Drinks will benefit from access to leading-edge dairy research and development capability and further investment as part of the Mengniu business.”
The sale, however, excludes Lion’s alcohol businesses in Australia and New Zealand, and its global Lion Little World Beverages business.
Lion Dairy & Drinks’ speciality cheese business was sold to Saputo Dairy Australia for A$280m ($189.8m) in October 2019.
The completion of the latest deal will represent Kirin’s full divestment of the Dairy & Drinks business.