China’s Mengniu Dairy buys Lion Dairy & Drinks business, including Masters, Pura, Yoplait and Daily Juice brands

Lion Dairy & Drinks, the business behind WA white milk brands Masters and Pura, will be sold to China’s Mengniu Dairy for $600 million. The new owner says it wants to grow the business by tapping its vast distribution networks in Asia, as well as potentially making strategic investments in additional production capacity and capability to drive product innovation and access new markets. Lion chief executive Stuart Irvine announced this morning the Mengniu Dairy and Kirin Foods Australia (a wholly owned subsidiary of Japanese-owned Lion) reached an agreement, involving the sale of all white milk, milk-based beverages, yoghurt, juice and water ice brands and assets. The portfolio includes Dairy Farmers, Pura, Dare, Farmers Union, Yoplait, Daily Juice, The Juice Brothers and Berri, and Masters in WA. About 30 farmers in WA supply milk to Lion, which is processed in Lion’s Bentley milk factory. The facility has been upgraded in the past three years at a cost of $43 million and forms part of the sale. Across Australia, Lion purchases about one billion litres of milk from more than 550 dairy farmers. The sale agreement includes Lion Dairy & Drinks’ international business, and Dairy & Drinks’ share of the joint ventures Vitasoy Australia Products and Capitol Chilled Foods Australia, along with Dairy & Drinks’ licensing agreement for the Yoplait brand. Lion also owns Fremantle brewer Little Creatures. The sale is subject to Australian Competition and Consumer Commission and Foreign Investment Review Board approvals and other conditions. Mengniu Dairy chief executive Jeffrey Minfang Lu said the proposed acquisition would deliver significant benefits to both businesses, while providing real opportunities for Australian dairy farmers, fruit growers and regional communities. “This acquisition brings together the best of the east and west, harnessing Mengniu Dairy’s networks in existing markets and D&D’s leading brands and production capability,” Mr Lu said. “I truly believe our proposed acquisition will bring tremendous opportunity for the entire Australian dairy sector, opening up a channel to our home market in a very significant way.” Mengniu Dairy plans to promote the profitable growth of the D&D business both domestically and in China and South-East Asia. It will do this by leveraging Mengniu Dairy’s vast distribution networks in Asia, as well as potentially making strategic investments in additional production capacity and capability to drive product innovation and access new markets. WAFarmers dairy section president Michael Partridge said he was pleased the business, which had been on the market for more than 12 months, had finally been sold and ended uncertainty about its future. “We hope that WA will be part of the new owner’s growth strategy going forward,” he said. Once completed, the sale — together with that of the specialty cheese business to Saputo Dairy Australia for $280 million earlier this year — will represent a full divestment of the Dairy & Drinks business. In 2017, WA’s Brownes was sold to a consortium led by Chinese dairy giant Shanghai Ground Food Tech.