ACCC approves Saputo’s proposal to acquire Murray Goulburn

The Australian Competition and Consumer Commission (ACCC) has approved Canada-based Saputo’s proposed acquisition of Australia’s largest dairy company Murray Goulburn.

ACCC allowed the acquisition after it received a court-enforceable undertaking from Canadian dairy company Saputo to divest Murray Goulburn’s Koroit plant within a specified period. Saputo will need to find a suitable buyer to be approved by the competition authority.

Saputo’s enforceable undertaking also includes details about milk supply arrangements during the transitional period, as well as information regarding the plant’s independent management before the sale.

ACCC chair Rod Sims said: “Saputo’s divestiture undertaking has remedied the ACCC’s competition concerns about the Koroit plant.

“The undertaking creates an opportunity for a viable competing milk processor to enter or expand in the local region. When approving a new owner of Koroit, we will focus on its ability to be a strong and effective competitor for raw milk in the region.

“The ACCC has carefully considered responses from a broad range of market participants about Saputo’s undertaking and the broader transaction.”

A spokesperson for Murray Goulburn explained that Saputo’s divesture of Koroit will not affect the terms of the Australian firm’s asset sale to Saputo, including the consideration that its shareholders will receive from the sale. The acquisition of Murray Goulburn’s assets is subject to the approval by voting shareholders, as well as approval by the Foreign Investment Review Board.

Sims added: “We heard from and spoke with many farmers who expressed concerns with the ACCC intervening in this transaction in the short term because they wanted certainty and stability after a bumpy ride with Murray Goulburn.

“I want to assure them that our aim is to put in place an outcome that works in their best interest by promoting competition in the medium to longer term while minimising short term uncertainty.”