November 26, 2019
Mengniu Dairy China set to purchase another Australian dairy firm, owned by Kirin
Hong Kong-listed Mengniu, partly owned by the China government, is set to buy Lion Dairy & Drinks from Japan's Kirin Holdings for 600 million AUD (~US$407 million; 1 AUD = US$0.68), its second dairy buyout in Australia, reported Reuters.
The sale will see Mengniu control Australian household dairy brands such as Pura, Dairy Farmers and Moove flavoured milk, as Kirin looks to offload its underperforming assets located outside Japan.
Mengniu recently purchased Bellamy's, another Australian dairy firm for 1.43 billion AUD (~US$969.4 million) under stipulated conditions by the Australian government.
In a statement, Mengniu said the purchase will give the company access to Australia's significant dairy industry and an opportunity in Asia Pacific markets, through Lion Dairy's 13 manufacturing facilities located throughout the country, as well as its extensive cold chain distribution network.
The deal comes at a time when Australia-China relations have strained after Australia accused China of political interference. Both countries signed a free trade agreement in 2015.
China companies are purchasing health and dairy companies from Australia to supplement a shortfall in local supply, in addition to profiting from foreign produce demand following a contamination scare 10 years ago.
Listed in Tokyo, Kirin purchased Lion Dairy in 2009 as part of the company's takeover of Lion Nathan, an Australian alcoholic drink company.