Warrnambool Cheese and Butter, majority owned by Canadian dairy giant Saputo, has bought the cheese business from drinks and food company Lion for $137.5 million.
The moved further consolidates Saputo’s hold on dairy in Australia.
The sale is subject to Warrnambool Cheese and Butter shareholder approval. However, Saputo, which owns 87.92% of Warrnambool, will vote in favour.
The deal will add the brands Coon, Mil Lel and Cracker Barrel to Warrnambool’s stable which includes Great Ocean Road cheddar.
Peter West, Managing Director of Lion Dairy & Drinks, said the decision to sell is part of a broader three-year strategy to turnaround performance and drive sustainable profit growth.
“We are focusing resources behind our biggest growth opportunities, which are in higher-value categories such as milk based beverages, speciality cheese and yoghurt,” he said.
Lion’s drinks brands include Tooheys, James Boag and XXXX.