Bega joins forces with Dutch Dairy Giant to acquire Fonterra’s Oceania Business

AUSTRALIA – Bega Cheese, a dairy manufacturer, has partnered with a Dutch dairy giant to lodge a joint A$2 billion (US$1.33 billion) bid for Fonterra’s Oceania consumer and foodservice business.

The target portfolio includes iconic brands like Anchor, Mainland, Western Star, and Perfect Italiano, along with operations in Australia, New Zealand, Sri Lanka, Southeast Asia, the Middle East, and Africa.

Bega has confirmed it will seek informal clearance from the Australian Competition and Consumer Commission (ACCC) before any formal offer, underscoring the deal’s regulatory sensitivities.

The acquisition process has been complicated by Fonterra’s refusal to grant Bega access to its data room. The New Zealand co-operative cited ongoing legal disputes over change-of-control clauses tied to the Bega brand, which Fonterra uses under licence.

Fonterra announced that it would explore full or partial divestment options for ‘some or all’ of its global consumer business, as well as its integrated businesses, Fonterra Oceania and Fonterra Sri Lanka, in 2024.

The planned disposals are part of Fonterra’s strategy to exit its consumer-facing operations to focus on dairy ingredients and the foodservice channel.

In a filing with the Australian Securities Exchange today (16 June), Bega Group said it plans to lodge an application with the Australian Competition and Consumer Commission (ACCC) imminently.

Bega Group stated that it believes that if it were to be included in the sale process and become the successful acquirer of the Oceania assets, it would significantly enhance outcomes for the company and the dairy industry as a whole, particularly in Australia.

“The combination of the Fonterra and Bega Group assets in Australia would lead to greater efficiencies and enhanced outcomes for Australian farmers, customers and consumers,” the company stated.

Other competitors

This partnership bid comes amid a fiercely competitive sale process. Lactalis (France), Meiji Holdings (Japan), and Saputo (Canada) have also advanced to later bidding rounds.

Private equity giants, including KKR, Permira, and Pacific Equity Partners, are also reportedly interested. Lactalis recently received informal ACCC clearance, strengthening its position in the race. Meiji Holdings, initially considered a slower contender, is now emerging as a serious challenger.

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