The Australian Competition & Consumer Commission (ACCC) has given the nod to China Mengniu Dairy Company Ltd (Mengniu) for the proposed acquisition of Lion Dairy & Drinks Pty Ltd (Lion D&D).
Mengniu has also recently completed the $2.2bn takeover of infant formula company Bellamy’s Australia, in line with its aggressive acquisition strategy. The series of acquisitions will create greater synergies for the group not only from the geographical footprint point of view but also from the supply chain perspective.
Lion has been trying to sell its dairy portfolio since 2018, which comprises of Big M, Pura, Dairy Farmers, Berri and Daily Juice brands. In October last year, Lion sold its specialty cheese business to Saputo Dairy Australia, with plans to focus on high-margin alcoholic beverage and premium non-alcoholic drinks in Australia and New Zealand.
According to Global Data, the APAC dairy and soy food sector is forecast to grow from $194bn in 2018 to $254bn in 2023, registering a compound annual growth rate (CAGR) of 5.5 per cent. The Australian dairy and soy food sector is expected to reach from $12.1bn in 2018 $14.8bn in 2023.
Lion usually purchases around 1 billion litres of milk from more than 550 Australian farms each year to produce a diverse range of full cream, flavoured and modified fresh and UHT milks.