Another Australian Dairy Company Bites The Dust for

Murray Goulburn to be sold to Saputo for $1.3 billion

CANADIAN family dairy company Saputo Inc has won the battle for Victorian-based dairy co-operative Murray Goulburn.

Murray Goulburn has announced it has entered into a binding agreement to sell to Saputo Dairy Australia Pty Ltd, the Australian arm of the Canadian dairy giant, for $1.3 billion.

MG chairman John Spark said the weight of debt and significant loss of milk to competitors had forced MG’s hand.

The sale includes all of MG’s assets and operating liabilities.

The $1.3-billion price is equivalent to a net value of $1.10 to $1.15 a share, or listed unit.

Shareholders and unit holders are expected to be paid an initial distribution of 75 cents a share, or listed unit, after the sale is completed in the first half of next year.

MG said unit trust holders will be treated equally with the co-operative’s shareholders.

MG’s shares, or listed units, traded on the Australian Securities Exchange closed at 83 cents yesterday.

In the first half hour of trading on the ASX today, the price of MG shares, or listed units, jumped to 87c.

The deal is subject to approval from the Foreign Investment Review Board and the Australian Competition and Consumer Commission.