Lion Dairy & Drinks has agreed to sell its major cheese brands to Warrnambool Cheese and Butter Factory Company Holdings Limited (WCB) for $137.5 million.
According to Lion Dairy & Drinks managing director Peter West, the company aims to invest more in its milk-based beverages, specialty cheese and yoghurt brands such as Dare iced coffee and Farmers Union Greek yoghurt, its biggest growth opportunities.
Dare iced coffee sales overtook sales of Coca-Cola for the first time this summer in convenience stores according to Lion Dairy & Drinks.
WCB announced that it has entered into an agreement to acquire the everyday cheese business (EDC Business) of Lion Dairy & Drinks based in Victoria, Australia, which includes the Coon, Cracker Barrel, Mil Lel and Fred Walker brands.
The EDC Business’ operations include cutting and wrapping, distribution, sales and marketing and intellectual property associated with the cheese brands.
The EDC Business generates annual sales of approximately $160 million and employs approximately 170 people. The cut and wrap operations of the EDC Business are located in a building owned by WCB, which is adjacent to WCB’s cheese manufacturing facility at Allansford.
WCB said that the transaction will enable it to increase its presence in the consumer branded everyday cheese products segment in Australia.
The transaction is expected to close towards the beginning of May 2015. Saputo Inc., which holds 87.92% of the shares in WCB, is supportive of the transaction.
Lion Dairy & Drinks is owned by Japan’s Kirin Holdings, which acquired National Foods and Dairy Farmers in 2007-08 and brands such as Pura, Dairy Farmers, Farmers Union, Moove, Dare, Big M, Yoplait, and cheese brands such as Coon, King Island and Heritage brands.