Bega Cheese Limited announced today the dairy company is set to acquire a majority of Mondelēz International’s grocery and dairy brands — particularly Aussie’s most iconic brands of Vegemite — for $460 million.
“The wonderful heritage and values that Vegemite represents and its importance to Australian culture makes its combination with Bega Cheese truly exciting,” according to the executive chairman of Bega Cheese, Barry Irvin.
“Bega is a company with humble origins and to be in a position to be able to take on a business of this scale and with brands including Vegemite is a testament to how far we have come.”
Apart from Vegemite, Bega will also have ZoOsh and Bonox under its name. The dairy giant will use the Kraft brand under licence for their products including peanut butter, nut spreads, processed cheese slices, ambient cheese spread, mayonnaise, parmesan cheese, Kraft Easy Mac and Kraft Mac & Cheese. It will include Mondelez’s Port Melbourne site.
Furthermore, Bega will also receive a license to the Dairylea brand for use in Australia and New Zealand. However, Philadelphia is not included in the deal.
“It’s been an absolute honour and privilege to have nurtured brands such as Vegemite for the past 90 years. But as we further our focus on core snacking categories and global power brands, the time is right for these brands to take the next step in their journey. We are pleased to have found a home for these talented people and grocery brands in a company that shares our passion for their future,” Amanda Banfield, vice president for Mondelēz International Australia, New Zealand and Japan.
The deal will be fully funded by Bega’s existing $500 million banking facility and is expected to boost its earnings by $40-$45 million and revenue by $310 million during the first full year of operation, according to the dairy giant.
“We feel honoured to be bringing these businesses together and to be taking on the responsibility and guardianship of one of Australia’s most loved brands and we look forward to welcoming over 200 talented people into our business as part of this acquisition. This purchase represents an exciting opportunity bringing the [Mondelez] grocery business under the ownership of a high quality much loved Australian company, Bega,” Irvin further commented.
Mondelez, which represents the international assets of the former Kraft Foods following its 2012 spin-off of its North American grocery business, said it will now focus on brands including Cadbury Dairy Milk chocolate and Oreos.
“The addition of the iconic Vegemite brand as well as a number of household Kraft products will build Bega Cheese’s reputation as an iconic Aussie company. As well as allowing Bega Cheese to diversify out of cheese to other products.” Alice Yu, research analyst from Euromonitor International, also commented on the recent Bega acquisition.
The transaction is expected to be finalised by the first half of 2017 and Bega foresees new cash flow and growing businesses that mirror its existing structure and greater diversification to its already existing dairy foods and nutritional businesses.