The sale of Lion Dairy and Drinks is entering the home straight. Username. Win at Retirement Admittedly, there is quite a bit of international exposure, but with over 40 different export countries, it doesn’t seem too concentrated on one particular area or country. A lower supply means that buyers must compete for volume, which drives up the price. Lion Dairy & Drinks is the company behind a wide range of brands such as Dare, Farmers Union, Juice Brothers, Pura, and Yoplait. The Complete Guide to Planning For Your Retirement, Setting up an SMSF: 10 Things You Need to Know Before Starting, 3 easy steps to building your ASX share portfolio for an early retirement, 4 tips on how to pick winning stocks for your retirement share portfolio, This is the best asset to own to start saving for your early retirement, Commonwealth Bank of Australia (ASX: CBA), Flight Centre Travel Group Ltd (ASX: FLT), Vanguard Australian Shares Index (ASX: VAS), BHP (ASX:BHP) share price on watch after Samarco update, Why the a2 Milk (ASX:A2M) share price will be on watch today, 2 of the best ASX healthcare shares to buy in 2021. Here are the details. James is part of the CFA Institute’s Chartered Financial Analyst program and hopes it teaches him how to become an astute investor which allows him to help others with their own investing. This acquisition appears to make a lot of sense and has the attractive features of both vertical and horizontal integration. At the time of publishing, the author of this article does not have a financial or commercial interest in any of the companies mentioned. The Motley Fool has a disclosure policy. My own view would be that Bega is coming out of the bottom of its cycle given the recent improvement in seasonal conditions that will provide a nice tailwind for milk production. On 27 November 2020, BGA shares quoted at $ 5.435, up by 7.41% from the previous close. No gimmicks, just free stock research and more. The deal with Lion is expected to double the total revenue of Bega Cheese to nearly A$3 billion in the current fiscal as against A$1.49billionin FY20. Last year, Lion was intended to be sold to Chinese company Mengniu Dairy, however, the deal was terminated by the Australian government on national interest grounds. Bega said its purchase includes milk, cream, juice and yoghurt products under brands such as Dairy Farmers, Pura and Yoplait. I see this as a huge tailwind (if it remains unregulated), but what’s even better is that this Lion acquisition will result in fewer different buyers in the market for milk who would typically compete with each other for the best price. X. X. X. X. Lion had already sold its specialty cheese business to Saputo Dairy Australia for A$280m (US$190m), a subsidiary of Canada’s Saputo Inc., which concluded on October 28. That means, the advice does not take into account your objectives, financial situation or needs. One little-known Australian IPO has doubled in value since January, and renowned Australian Moonshot stock picker Anirban Mahanti sees a potential millionaire-maker in waiting... Because 'Doc' Mahanti believes this fast-growing company has all the hallmarks of genuine Moonshot potential, forget 'buy now pay later', this stock could be the next hot stock on the ASX. Subscription Terms of Service, ACN: 146 988 052 | Australian Financial Services Licence (AFSL): 400691, The Motley Fool Australia, PO Box 4635, Ashmore, Qld 4214. His interest in investing first started in university while he was part of the Student Managed Fund. 75,000 tonnes of fruit from orchards across the country. Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The information on this website is general financial advice only. It’s horizontal in the fact that Bega has essentially eliminated a direct competitor that sells similar products. Bega Cheese (ASX:BGA) has entered into a binding agreement to acquire Lion Dairy & Drinks Pty for $534 million. Bega Cheese has raised approximately $284 million at a 9.1% discount of $4.60 per new share. Lion Dairy acquisition. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Click here now to get the report. Mengniu said the Lion business procured the equivalent of about 825 million litres of milk per year. Investment news, stock ideas, and more, straight to your inbox. You can unsubscribe at anytime. Our latest articles and strategies for the post-work life you want. Each company boasts strong growth prospects over the next 3 to 5 years, and most importantly each pays a generous (and fully franked) dividend! The addition of juice products from Lion (through brands such as Berri, Mildura and Just Juice) adds some diversification away from milk-based products, which can be cyclical based on supply constraints. Terms, Financial Services Guide, Privacy Policy. For a limited time, The Motley Fool Australia is giving away an urgent new investment report outlining our 5 favourite stocks for investors over 50. The Bega Cheese Ltd (ASX: BGA) share price is soaring today following news the Aussie dairy company will acquire Lion Dairy & Drink. Something I’ve recently learned about the dairy industry is that it’s largely unregulated by the Australian government. Click here or enter your email address below to access the stock code, 3,500-word analysis and founder interview. Bega Cheese (ASX:BGA) share price jumps 10% on Lion Dairy & Drinks acquisition Motley Fool Australia. The company made a series of acquisitions over the years and officially became a company in 2008 and listed on the ASX in 2011. Our top analyst has just identified his #1 'MedTech' stock idea for 2021 and beyond. Please refer to our Financial Services Guide (FSG) for more information. The recent company restructure and ERP implementation will allow us to integrate this Acquisition and take advantage of the various synergies and growth opportunities across domestic and international markets.”. Join Our Premium Community Order products and manage your account online. Yesterday, Bega revealed it has entered a binding agreement to purchase Lion Dairy & Drink in a $534 million deal from Japanese company Kirin. Please read our Terms & Conditions and Financial Services Guide before using this website. Unsubscribe anytime. LDD procures approximately 825m liters of milk equivalent and 50m kilograms of fresh fruit from approximately 280 farmers and 85 fruit growers annually. Bega Cheese Ltd (ASX:BGA) announced some major acquisition news about Lion Dairy. Authorised by Scott Phillips. Management’s base case is for synergies of $41 million per annum. In addition to this, Lion Dairy & Drinks has Australia’s largest national cold chain distribution network supplying food service and convenience stores. Management expects the combined business to generate annual revenues in excess of $3 billion. Commonwealth Bank of Australia (ASX:CBA) shares are rising, is it time to jump on the major ASX bank? 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