Canadian dairy producer Saputo Inc. on March 5 proposed selling a dairy plant operated by Murray Goulburn Co-Operative Co. Ltd., or MG, in western Victoria, Australia, to gain regulatory approval for an acquisition deal worth A$1.31 billion.
The Australian Competition and Consumer Commission had raised concerns about Saputo owning MG's plant in the town of Koroit in addition to its current Allansford plant in western Victoria. The regulator said that would give Saputo two-thirds of the region's raw milk processing capacity and "substantially lessen" competition, according to a March 1 statement.
In response, Saputo has started discussions with the ACCC about a divestment plan for the Koroit plant. Australia-based MG said in a March 6 statement that such a plan would not affect the terms of Saputo's acquisition offer.
In October 2017, MG agreed to sell all operating assets and operating liabilities to Saputo for approximately A$1.31 billion. The proposed transaction also includes MG's milk supply commitments, and completion is expected to take place May 1.
As of March 5, US$1 was equivalent to A$1.29.
