Brownes Dairy, one of the oldest dairy companies, and also the largest milk producer in Western Australia (WA), has been put up for sale after its biggest lender, China’s Mengniu Dairy recalled its A$200 million (US$129.3 million) loan.
Brownes Dairy is the market leader in WA in milk but also sells a range of yoghurt, cheese and coffee nationally through major supermarkets like Coles, Woolworths and IGA.
It was established in 1886 and recorded annual sales of A$300 million (US$194 million).
The dairy segment in Australia is facing aggressive M&A activities in recent years as bigger companies are consolidating and buying up smaller dairy companies.
McGrathNicol, an advisory firm, was appointed by a Mengniu subsidiary to sell Brownes. Brownes has been owned by Chinese investors for 8 years after being sold by Archer Capital. The sale came as Mengniu was rapidly expanding in Australia, proposing to spend A$600 million (US$388 million) buying brands like Dairy Farmers, Pura and Farmers Union from Lion. That transaction was however blocked by the government. As a result, Bega Cheese successfully acquired the Lion business for A$560 million (US$362.2 million) and added milk, juice and yogurt brands to its portfolio.
