Kirin unit lodges offer for Dairy Farmers: source
MELBOURNE (Reuters) - Australian dairy and juice producer National Foods, owned by Japanese brewer Kirin Holdings (2503.T), has made an initial offer to buy milk and cheese producer Dairy Farmers, a source said, in a deal that could be worth up to $920 million.
A deal would mark a significant ramp-up in Kirin's presence in Australia, just a few months after it bought National Foods, one of the country's largest food groups, for A$2.8 billion ($2.7 billion).
"National Foods has put in an indicative offer," the source familiar with the situation told Reuters on Monday, speaking on condition of anonymity.
A spokesman at National Foods declined comment, as did a Kirin spokeswoman.
Kirin and its rival Japanese beer makers have been under pressure to diversify as the country's beer market has been shrinking for more than a decade, with volume sales down more than 10 percent since peaking in 1994.
Kirin narrowly trails No. 1 Asahi Breweries (2502.T) in the Japanese beer market but has larger profits and revenue as it has stayed ahead of rivals in expanding in other areas such as drugs and overseas markets.
Dairy Farmers, which is owned by some 2,000 Australian farmers and makes Dairy Farmers brand milk, Coon cheese and Ski yoghurt, put itself up for sale last month.
It said on Friday it has seen wide interest in a potential deal, which could be worth A$800 million-A$1 billion.
Kirin bought National Foods, whose brands include Pura milk, Big M flavored milk and Yoplait yoghurt, in November.
INITIAL BIDS
First-round offers in the sale process, which is being run by Goldman Sachs JB Were, have closed. Dairy Farmers will assess the bids before inviting second and final offers.
Dairy Farmers, a cooperative formed in 1900, has long been considered likely to take part in a rationalization of the sector because of the cost savings it could offer other large dairy players.
Last week, the group confirmed the sale process was underway, telling its farmers on Friday that it would be "methodical" in its assessment of various options.
"The board will use this formal process, including necessary confidentiality requirements, in a rigorous and fair manner with all interested parties," Chief Executive Rob Gordon said.
Analysts have said other potential bidders include unlisted New Zealand dairy giant Fonterra, Italy's Parmalat (PLT.MI), Australian food group Goodman Fielder (GFF.AX) and Singapore's Olam International (OLAM.SI). Continued...
