Australian dairy processor Murray Goulburn has struck a deal to sell all of its operating assets to the Canadian dairy player Saputo for $US1.3 billion ($1.7 billion).
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The deal with Saputo was announced just a couple of hours before Murray Goulburn holds its annual general meeting in Melbourne on Friday, where farmer suppliers and unit holders were expecting an update on the proposed sale of the company.
In a statement to the ASX on Friday morning, Murray Goulburn said the deal included increased payments to farmers who supply Murray Goulburn for their milk.
The higher payments were described as a 40¢ a kilogram of milk solids extra payment, for milk supplied this financial year. An additional "loyalty payment" in fiscal 2018, of another 40¢ a kilogram of milk solids "for active MG suppliers" was also unveiled.
MG said: "Active MG suppliers will also benefit from a series of commitments from Saputo ensuring milk collection and market pricing into the future."
The deal with Saputo, a major Canadian dairy player that bought Warrnambool Cheese and Butter in recent years, remains subject to approval by MG voting shareholders, the Australian Competition and Consumer Commission and the Foreign Investment Review Board.
Australian dairy producer Bega Cheese announced on Thursday that it had pulled out of the race for Murray Goulburn.
Murray Goulburn earlier this month announced it would cut 60 tanker operator roles.
The changes affected 60 tanker operators working in Koroit, Leongatha, Maffra and Rochester who were part of Murray Goulburn’s Inbound Logistics company.
Murray Goulburn in May announced it will close its Rochester factory in early 2018.
More to come.
