Page 70 - Food&Drink Nov-Dec 2020

MERGERS & ACQUISITIONS
Clearing house
This year saw the finalisation of billion dollar deals and more modest acquisitions. Despite the uncertain times and market volatility, the food and beverage industry showed it slows for no one. Kim Berry writes.
bringing the beverage behemoths together began.
The ACCC required Asahi to sell off three cider brands and two beer licences for the sale to be finalised, but only then if the ACCC approved of the buyer
– kind of the corporate equivalent of bringing your date home to meet the parents.
Heineken stepped up to the threshold and looks to be the new owner of Strongbow, Little Green and Bonamy’s and the perpetual licences for beer brands Stella Artois and Beck’s. The fact CUB manufactures Heineken in Australia under licence just adds a bit of spice.
DAIRY DEALS
Back to dairy. Synlait received approval from New Zealand’s Overseas Investment Office for its NZ$112 million acquisition of Dairyworks, proposed in October 2019.
In September, Fonterra announced its intentions to buy Dairy Country for $19.23 million. Considering the co-op currently holds a 23 per cent market share of the Australian retail cheese market with brands including Perfect Italiano, Mainland and Bega, the ACCC will be giving the proposal a good side-eye.
Dairy Country is owned by Retail Food Group and the deal includes two Victorian packing and processing facilities, as well as related services, intellectual property and the trademark for the Dairy Country brand. To give you an idea of scale, the Australian retail cheese category is worth around
$2.6 billion.
Following that announcement, Fonterra sold its two Chinese farms
in Ying and Yutian for $482 million to China
Youran Dairy Group subsidiary, Inner Mongolia Natural Dairy Co and 85 per cent of its interest in its Hangu farm to Beijing Sanyuan Venture Capital Co for $39.5 million.
The company had built the farms from scratch, sharing farming techniques
and animal husbandry with the local dairy industry. CEO Miles Hurrell said the sale was part of its strategy to refocus on its local market.
ON YOUR MARKS,
GET READY
To events in one of the fastest growing market segments, ready meals. This was not a quiet space this year. In March, the ACCC approved the Coles Group subsidiary Chef Fresh to buy chilled ready meals manufacturer Jewel Fine Foods, which has been in voluntary administration since April 2019. This was after it rejected B&J Kitchen’s proposal in September 2019 because of competition concerns in the chilled ready meal market.
B&J City Kitchen is 77 per cent owned by Beak and Johnston Holdings and 23 per cent by Woolworths Group. B&J City Kitchen supplies nationally to grocery retailers including Woolworths, Coles, Metcash and Harris Farm.
Then in June, General Mills sold two of its ready meal brands to Beak & Johnston – Ready Chef and Pasta Master – and licensed a third, Latina’s chilled ready meals category. General Mills said it wanted to drive stronger growth for the Latina master brand. Existing Beak & Johnston brands are Pitango, Beak & Sons, Simmone Logue Fine Food and Strength Meals Co.
And SPC, which is on an aggressive growth strategy to be a $1.5 billion company in three years (it’s one year in), acquired frozen food manufacturer Kuisine Co.
It produces prepared meals and finger foods with a range of clients including Aldi, health services, the NDIS, Meals on Wheels and other food service clients. The acquisition includes Kuisine Co’s wholly owned brands – The Good Meal Co, The Gluten Free Meal Co, and Simply Special.
SPC CEO Robert Giles said the deal will expand SPC’s existing footprint in the healthcare space, its frozen food and ready meal offerings, and open up new channels outside of retail.
Pure Foods Tasmania acquired Daly Potato Company
DAIRY & DRINKS ROUND 2
The year started with much promise for Lion. The $280 million sale of its Dairy & Drinks’ (D&D) speciality cheese portfolio to Saputo was finalised in October 2019 and just as the ink was drying, China Mengniu Dairy Company (CMDC) stepped up with a $600 million offer for the rest of D&D.
Lion and CMDC walked away from the deal in August after the Foreign Investment Review Board (FIRB) would not provide a decision on the proposal. Poor timing (CMDC made the offer just two weeks after Federal Treasurer Josh Frydenberg and FIRB gave conditional approval for it to buy Bellamy’s Organic for $1.5 billion), growing trade tensions and a global pandemic were all contributing factors.
As we go to press there is much conjecture about which
company will scoop up the 10 processing sites and range of brands in the portfolio. Saputo quietly threw its hat back in the ring, with its offer now under review by the Australian Competition and Consumer Commission (ACCC). Two other interested parties are Bega and asset manager
Tanarra Capital.
ASAHI, CUB UNION
Meanwhile, Asahi’s $16 billion acquisition of Carlton & United Breweries unfolded at a glacial pace, probably wise and warranted when that amount of money is involved. Once the ACCC gave its conditional approval and FIRB signed off, the herculean task of
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