Fonterra (FSF), the world’s biggest dairy cooperative, is making its second significant Australian investment in a week, buying distressed Tasmanian yoghurt maker Tamar Valley Dairy.
The New Zealand company says it will acquire the processing equipment, related services and the Valley Dairy brand by the end of the month after buying a 6% stake on Thursday in Uncapped 100 company Bega Cheese (BGA), which is seeking to acquire Warrnambool Cheese & Butter Factory (WCB) (see WCB: All the way to $8.50?).
“Acquiring the Tamar Valley Dairy yoghurt business is a very important step in strengthening Fonterra’s strong national position in the chilled dairy segment in Australia, and complements our existing yoghurt portfolio, where we hold a market-leading position in mainstream yoghurt through the Nestlé SKI brand,” Fonterra’s Australian managing director Judith Swales said in a statement.
Fonterra declined to disclose the price it paid for Tamar Valley Dairy.
In Tasmania, Fonterra operates two manufacturing facilities at Spreyton and Wynyard. The company processes over half of Tasmania’s milk.
Fonterra is also one of the major milk buyers in western Victoria along with Warrnambool and Murray Goulburn Co-operative.
Fonterra’s stake in Bega is seen as friendly by both sides but both companies have declined comment on what such a shareholding means for Bega, whose constitution limits anyone shareholder to a stake of no more than 10%.