January 15, 2014

China's Bright Food to acquire Australian dairy company Mundella Foods

China's Bright Food (Group) Co Ltd plans to buy Australian dairy company Mundella Foods through its Australian subsidiary, Manassen Foods, driven by its aim to expand its overseas reach, especially in growing dairy markets.

Bright Food's overseas expansion has seen it acquire Manassen in 2011, which supplies food brands to Australian retailers, and New Zealand's Synlait Milk Ltd (SML.NZ). Manassen Foods has signed an agreement to buy Western Australia's Mundella, Bright Food spokesman Pan Jianjun said.

Mundella produces soft cheese, yoghurt and probiotic yoghurt drinks. It began exporting to Asia in 2010 and has a contract for sour cream with Wesfarmers Ltd's (WES.AX) Australian supermarket chain Coles.

Due to surging sales in Asia of both traditional products such as milk and cheese and for high-tech nutraceuticals and probiotics, interest in Australian dairy assets has grown.

A takeover battle for the country's oldest dairy producer, Warrnambool Cheese and Butter Factory Holdings Co (WCB.AX), has been one of the most hotly contested deals in recent months, as Canada's Saputo Inc (SAP.TO) attempts to outbid local dairy companies Murray Goulburn Co-operative Co Ltd and Bega Cheese Ltd (BGA.AX).

Terms of the deal have been decided and once Mundella's 2013 financial results are available, the transaction value will be finalised, Pan said.