Fonterra Backstops Bega For An Unconditional Run At Warrnambool Cheese

The intervention of New Zealand dairy giant Fonterra into the battle for Warrnambool Cheese (WCB) last week looks like a game-changer in the battle for control of the company.

The Sydney Morning Herald reports that the Board of Bega Cheese is set to meet today to both up the cash component of its bid and make it unconditional – meaning that WCB shareholders can start accepting and receiving cash for their shares.

However the battle for Warrnambool Cheese plays out and whoever emerges the winner, it is increasingly likely the entire dairy industry might come into play as eyes turn northward to the growing middle class in Asia and China in particular and an increased demand for dairy products.

The Australian also reports that Fonterra is set to acquire the failed Tamar Valley Diary in Tasmania and it seems clear that Fonterra sees great opportunity in Australian dairy consolidation and either on its own or with Bega wants to play a role in any consolidation which occurs over coming years.

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