Skip to main content

The Globe and Mail

Saputo bid for Australian dairy company faces new setback

Saputo president and CEO Lino Saputo Jr., right, and his father Lino chat prior to the the company's annual meeting in Laval, Que., in 2012. Saputo’s bid for an Australian dairy company faces longer odds after a Japanese beverage company purchased a 9.99-per-cent stake in the Australian firm.

Paul Chiasson/The Canadian Press

Japanese beverage giant Kirin Holdings Co.'s purchase of a 9.99-per-cent stake in Australia's Warrnambool Cheese & Butter Factory reduces the odds that Saputo Inc. will be successful in getting its hands on the Australian dairy company, one analyst says.

The stake acquired by Kirin's Australian milk processor – Lion – "makes [Saputo's] bid look increasingly at risk, in our view," Irene Nattel of RBC Dominion Securities said in a research note Tuesday.

"We now have a situation where three of the milk processors in Australia own a combined 45% of [Warrnambool], suggesting that the domestic players do not want to see a new competitor in the market."

Story continues below advertisement

Montreal-based Saputo recently sweetened its bid for Warrnambool to $8 (Australian) per share and the latter company's board has recommended shareholders accept it.

Two other Australian companies besides Lion have already made offers for Warrnambool – Murray Goulburn Co-operative and Bega Cheese Ltd. – and Saputo's attempts at taking control of Warrnambool have triggered nationalist concerns in the country.

Saputo president and chief executive officer Lino Saputo Jr. is in Australia meeting with key Warrnambool stakeholders, said Ms. Nattel.

She said Saputo's $8-per-share offer for Warrnambool at this point "looks highly unlikely to succeed, and it remains unclear as to whether any price would get the deal done."

Report an error Licensing Options
About the Author
Quebec Business Correspondent

Bertrand has been covering Quebec business and finance since 2000. Before joining The Globe and Mail in 2000, he was the Toronto-based national business correspondent for Southam News. He has a B.A. from McGill University and a Bachelor of Applied Arts from Ryerson. More

Comments

The Globe invites you to share your views. Please stay on topic and be respectful to everyone. For more information on our commenting policies and how our community-based moderation works, please read our Community Guidelines and our Terms and Conditions.

We’ve made some technical updates to our commenting software. If you are experiencing any issues posting comments, simply log out and log back in.

Discussion loading… ✨

Combined Shape Created with Sketch.

Globe Newsletters

Get a summary of news of the day

Combined Shape Created with Sketch.

Thank you!

You are now subscribed to the newsletter at

You can unsubscribe from this newsletter or Globe promotions at any time by clicking the link at the bottom of the newsletter, or by emailing us at privacy@globeandmail.com.