MURRAY Goulburn has made a defiant bid to take on rivals Saputo and Bega in the new battlefield over milk products in Asia.The farmer-owned cooperative said on Thursday it would bow out of the long race for Warrnambool Cheese & Butter (WCB), selling its stake to Saputo for around $93 million and officially marking the end of its efforts to take control of the dairy producer.
But chief executive Gary Helou said he plans to use the windfall to push ahead in Asia, where growing demand for milk products, particularly infant formula, was creating a whirlwind of competition for dairy players.
”Australia has a real role to play in Asia,” he said. ”We are already there, we just need to connect better.”
Mr Helou used his company’s withdrawal from the fight over WCB to criticise what he saw as an uneven regulatory playing field between local and foreign buyers.
He told Fairfax Media: ”There’s no question that the expedited [Foreign Investment Review Board] approval gave Saputo a distinct and, in my opinion, unfair advantage.”
Murray Goulburn’s bid for WCB was conditional on approval by the Australian Competition Tribunal, which was due to make a decision on February 4.
The FIRB granted its approval of the Saputo bid in November.
”It’s disappointing that the timelines in the regulatory framework weren’t aligned,” said Mr Helou.
“FIRB should have aligned their approval to give the local a proper contest. We were not playing on level playing field.”
Murray Goulburn’s exit from the WCB race cements Canadian rival Saputo’s control over the Victorian milk producer, with its interest rising to more than 75 per cent.
Murray Goulburn will now seek approval to withdraw its bid and its application to the Competition Tribunal from the Australian Securities and Investments Commission.
Murray Goulburn will receive cash proceeds of at least $92.9 million from the sale – a gain on investment before tax and costs of $51 million.
A Saputo spokesman declined to comment.
Source: Financial Review