Saputo Inc. has sold one of its major production plants in Australia to local rival Bega Cheese for $244 million.
The sale of the Koroit plant in the state of Victoria was a condition set by Australia’s competition regulators in April when it approved Saputo’s $1.3-billion takeover of the Murray Goulburn Co-operative — making the Quebec-based company the largest dairy processor in Australia.
With the Koroit plant in its arsenal, Saputo would have controlled more than two thirds of the country’s dairy processing. This concerned the Australian agency responsible for competition and consumer protection, in particular because of the effect it could have on the price offered to local milk producers.
Irene Nattel, the managing director of RBC Capital Markets, said she was pleasantly surprised by the amount Saputo received for Koroit, given that her “conservative” prediction for the sale was $175 million.