Chinese buyers circle United #Dairy Power

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United Dairy Power, Australia’s largest privately-owned milk supplier, may be sold within weeks after previous efforts to sell the Melbourne-based milk aggregator and processor to others – including Champ Private Equity – failed.
 
Established in 1999 and run by its founding partner Tony Esposito, United Dairy’s 2011 sales reached $125 million. The company’s earnings before interest, tax, depreciation and amortisation are estimated at between $8 million and $9 million per annum.
 
United Dairy’s cash flow has led some potential buyers to value it at between $30 million and $40 million.
 
Manassen Foods, a unit of China’s Bright Food Group Ltd, may be the frontrunner to acquire United Dairy, with a senior dairy executive describing the company as “acquisitive”.
 
Previous efforts to sell United Dairy have not succeeded due to concerns about how contracts with dairy farmers and buyers will be maintained. The company’s two factories, at Jervois and Murray Bridge in South Australia are not regarded as particularly desirable because they are not situated in a prime dairy catchment.
 
Still, Asian companies know their increasingly affluent consumers want safe, reliable dairy products, especially for infants and children, and Australian dairy assets are favoured in this regard.
 
China’s New Hope Group, which has annual sales of about $8.8 billion, may also be seeking to buy Australian dairy assets along with China Investment Corp, the investment arm of the Chinese state.
 
China Investment Corp has for weeks been looking for a Chinese food group to partner with in its pursuit of Warrnambool Cheese and Butter Factory Holdings Ltd. At the same time it is contemplating an acquisition of Van Diemen’s Land Co, which owns 25 dairy farms in north west Tasmania.
 
“Consolidation of dairy globally is continuing,” the senior dairy executive told DataRoom.
 
“As we’re seeing with Warrnambool, there’s an appetite to move into specialised production that sells well in Asian markets.”
 
Canada’s Saputo Inc has been trying for more than two months to acquire Warrnambool, which it wants to use as a springboard to sell its dairy product into Asia, especially the south east Asian countries of Indonesia, Singapore, Malaysia, the Philippines and Thailand.
 
Source: Business Spectator

Mirá También

Así lo expresó Domingo Possetto, secretario de la seccional Rafaela, quien además, afirmó que a los productores «habitualmente los ignoran los gobiernos». Además, reconoció la labor de los empresarios de las firmas locales y aseguró que están «esperanzados» con la negociación entre SanCor y Adecoagro.

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