Saputo buys Bega’s interest in WCB

Saputo will see its holdings in Warrnambool Cheese and Butter (WCB) increase to 45.2% following its acquisition of Bega Cheese’s 18.8% interest in the Australian dairy processor.

Saputo Dairy Australia will pay between $94.7m to $101m to Bega, based on relevant interest at the close of its offer. The transaction ends its relationship with WCB.

Bega has built its investment in WCB since 2010, with its total investment reaching $32.9m.

Bega Cheese executive chairman Barry Irvin said that the company’s investment in WCB has created significant value for both companies’ shareholders.

"Bega Cheese’s investment in Warrnambool Cheese and Butter has been a resounding success for both companies, enabling WCB to pay down debt in a time of need and positioning the company for the future," he said.

The company said that the proceeds from the sale add to its capacity and will be used to support its strategic business opportunities.

In October 2013, Saputo initially announced a $370m all-cash bid for WCB; however, it later increased its offer in November to A$9 a share.

In December, the Canadian firm said that it will offer A$9.20 in the event it acquires 50% or more shares in WCB, A$9.40 for more than 75% or more shares and A$9.60 if it acquires 90% of WCB shares.

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Image: Under the deal, Saputo will pay around $101m to Bega’s stake in Warrnambool. Photo: courtesy of Stephanie Berghaeuser.