Australia’s Beston Global Food Co. (BFC) has said Japan’s Megmilk Snow Brand Co. has made an offer for dairy assets it owns.
Specifically, in a stock-exchange statement in “response to media articles”, Beston Global said Megmilk Snow Brand wants to acquire its cheese and lactoferrin production business in Jervois, South Australia.
In July, the Australian group said it was in “live discussions on a number of proposals” for its dairy units and last month BFC suggested it may be on the cusp of completing a deal for its dairy and dairy nutrition business with an unnamed party.
Now it has named that potential acquirer but, by naming one specific production facility, the future of any remaining dairy assets is unclear. Just Food has asked Adelaide-based BFC for clarification on what businesses might remain post a deal with Megmilk Snow Brand.
In the statement, BFC said the Japanese company’s non-binding offer “contains a number of components” and is subject to a number of conditions including bank approvals and shareholder approvals.
BFC said its board is working through the conditions of the offer and discussing further with Megmilk Snow Brand to obtain clarification on a number of matters, including the total purchase price.
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By GlobalData
Megmilk Snow Brand is listed on the Tokyo Stock Exchange and is one of the largest dairy companies in Japan, with a market capitalisation of A$1.7 bn ($1.13bn).
It has made a number of dairy company acquisitions Down Under over the past 30 years and owns the Unicorn Cheese Company in New South Wales, an infant formula packaging facility in Tatura, in the same state, and the Udder Delights business in Australia.
The company has operations in Japan, Taiwan, Indonesia, China, Hong Kong, Malaysia and the US and has recently announced its intention to expand into Vietnam with construction of a cheese processing plant in Ho Chi Minh.
BFC, the largest South Australian dairy company and the seventh largest in Australia, said in July it had faced financial difficulties from a rebound in Australian milk production following the lowest output in 2023 in 30 years, putting strains on finished production capacity.
“The effect of the higher milk volumes vs expectations has also been exacerbated by the unprecedented level of dairy imports into Australia over the course of 2023 and early 2024 and the consequential competition at retail, bulk ingredients and foodservice channels,” it said at the time.
