This is primarily from milk network optimisation, indirect procurement, and a corporate reorganisation. That means, the information and advice does not take into account your objectives, financial situation or needs. Our latest articles and strategies for the post-work life you want. Every year we purchase around one billion litres of milk from over 550 Australian dairy farmers, and crush approx. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Bega has a long and rich history in Australia and is well known for its variety of cheeses, peanut butter, vegemite and other dairy products. The Bega Cheese Ltd (ASX: BGA) share price is soaring today following news the Aussie dairy company will acquire Lion Dairy & Drink. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Bega Cheese (ASX:BGA) has entered into a binding agreement to acquire Lion Dairy & Drinks Pty for $534 million. At the time of writing, the food company’s shares are up 10% to $5.57. Please remember that investments can go up and down. Bega said its purchase includes milk, cream, juice and yoghurt products under brands such as Dairy Farmers, Pura and Yoplait. Management expects the combined business to generate annual revenues in excess of $3 billion. Outside of reading and researching he spends many a late night watching the English Premier League and Seinfeld reruns. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Upon announcing the deal, Bega Cheese’s Chief Executive Officer, Paul van Heerwaarden, commented: “We are very pleased with the performance of acquisitions made in recent years which are achieving or exceeding our profit targets. Your buying decision would therefore be based on your interpretation of where you think the company currently is in its cycle. This comprises $181 million via its placement and $103 million via its institutional entitlement offer. The acquisition is expected to generate significant synergies. So if you’re looking to get your finances on track and you’re in or near retirement – we’ve got you covered! The raising will be undertaken at an offer price of $4.60, which represents a 9% discount to Bega’s last traded price of $5.06. He is a firm believer in making small financial decisions now, which will have a large, cumulative effect later on in life. Lion Dairy and Drinks operates 11 Australian manufacturing facilites and has another two with joint-venture partners. Click here now to get the report. Unsubscribe anytime. Lion is an alcoholic beverage company that operates in Australia and New Zealand, and a subsidiary of Japanese beverage giant Kirin.It produces and markets a range of beer and cider in Australia, and wine in New Zealand and the United States through Distinguished Vineyards & Wine Partners. .fool-ecap.fool-ecap-id-19.fool-ecap-type-vanilla {background: #fff7c4;} aside section .fool-ecap-id-19.fool-ecap-type-vanilla h3 {font-size: 1.6em;} p.ecap-disclaimer {font-size: 0.6em!important;}div.fool-ecap.fool-ecap-id-19 form {position: relative;text-align: center;margin: .2em 1em;}.fool-ecap.fool-ecap-id-19 p.ecap-disclaimer {margin-left: 0px;} .fool-ecap.fool-ecap-id-19 p.above-email{ margin-bottom: 0px;text-align:center;} div.fool-ecap.fool-ecap-id-19 p {color: #464646;}.fool-ecap-type-vanilla.fool-ecap-id-19 h3 {color: #404040;display: block !important;}.fool-ecap-type-vanilla.fool-ecap-id-19 .ecap-disclaimer{color: #484848 !important;}.fool-ecap-id-19.fool-ecap-type-vanilla h3.title{display:none !important;} .fool-ecap.fool-ecap-id-19.fool-ecap-type-vanilla{ margin-bottom: 10px;}.fool-ecap-type-vanilla.fool-ecap-id-19 input[type="submit"] { margin: .5rem 0 .5rem !important;}.fool-ecap.fool-ecap-id-19 img {display: inline;}. The vertical integration, however, is where the significant cost savings will be driven from. It’s a brand many Australians would be extremely familiar with. This will bring the total raised to $401 million. While this has been a headwind in the past, the milk supply situation is starting to improve, which is reflected in the price of milk. This should result in cheaper raw materials, which bodes well for Bega’s bottom line. Past performance is not necessarily indicative of future returns. Authorised by Scott Phillips. Read our Terms, Financial Services Guide, Privacy Policy. Financial Services Guide | Commonwealth Bank of Australia (ASX:CBA) shares are rising, is it time to jump on the major ASX bank? Win at Retirement His interest in investing first started in university while he was part of the Student Managed Fund. Australia 1800 000 570 customersalesandservice@lionco.com. Subscription Terms of Service, ACN: 146 988 052 | Australian Financial Services Licence (AFSL): 400691, The Motley Fool Australia, PO Box 4635, Ashmore, Qld 4214. Instead, they engage with various suppliers (farmers) across Australia to purchase milk, which is then turned into various products. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. 75,000 tonnes of fruit from orchards across the country. The Bega Cheese Ltd (ASX: BGA) share price has returned from its trading halt and is surging higher on Friday. Bega Cheese (ASX:BGA) shares rise on Lion Dairy acquisition. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169. Image Source: © Kalkine Group 2020. 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. ASX-listed Bega Cheese is in the final stages of due diligence to acquire Kirin-owned Lion Dairy and Drinks. © 2009 - 2020 The Motley Fool Australia Pty Ltd. All rights reserved. Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. Bega Cheese (BGA) is set to snap up dairy giant Lion Dairy and Drinks (LD&D) in a half-billion-dollar purchase deal. ASX:BGA. Bega Cheese is reportedly buying Lion Dairy and Drinks. Investment news, stock ideas, and more, straight to your inbox. Bega Cheese shares emerging from a trading halt after Thursday’s confirmation it was buying Pura Milk owner Lion Dairy and Drinks, and jumped 7.12 per cent to $5.42. Lion Dairy & Drinks (LD&D Milk Pty Ltd and LD&D Foods Pty Ltd), is a subsidiary of Australian diversified food company Bega Cheese.. LD&D's factories (which carry the "Pura" branding) are located in: Chelsea Heights, Melbourne; Salisbury, Adelaide; Bentley, Perth; These sites are also printed on the back of all fresh milk bottles in Victoria, South Australia and Western Australia respectively. James Mickleboro has been a Motley Fool contributor since late 2015. Investors have been buying the company’s shares this morning after it completed the underwritten institutional placement and the institutional component of its 1 to 4.5 pro-rata accelerated non-renounceable entitlement offer. It is not specific to you, your needs, goals or objectives. Mengniu said the Lion business procured the equivalent of about 825 million litres of milk per year. In addition to this, Lion Dairy & Drinks has Australia’s largest national cold chain distribution network supplying food service and convenience stores. 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. Here’s why…. Listen to Our Podcast Each company boasts strong growth prospects over the next 3 to 5 years, and most importantly each pays a generous (and fully franked) dividend! ASX-listed dairy company Bega Cheese will purchase Lion Dairy and Drinks from Japan's Kirin for $534 million. Is Transurban (ASX:TCL) an ASX dividend share recovery idea. It will now push on with the retail component of the entitlement offer, which aims to raise a further $117 million. Privacy Policy | The sale of Lion Dairy and Drinks is entering the home straight. LDD procures approximately 825m liters of milk equivalent and 50m kilograms of fresh fruit from approximately 280 farmers and 85 fruit growers annually. I’ve looked past the valuation aspect for this one as I like the qualitative story of the company and this major acquisition. You can do it. 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. Learn about investing with our Investing Education hub. At the time of publishing, the author of this article does not have a financial or commercial interest in any of the companies mentioned. Click here to access the stock code, 3,500-word analysis and founder interview. Enter your email below to receive his free report. NextDC Ltd (ASX: NXT) shares have been my most recent purchase on the ASX. No gimmicks, just expert-proofed stock research and more. These include milk-based beverages such as Dare and Farmers Union, Yoplait yoghurts, Pura milk, and Juice Brothers juices. The Lion acquisition will complement Bega’s existing offering with the addition of other well-known dairy brands such as Dare, Vitasoy, Yoplait, Dairy Farmers, and more. According to the Department of Agriculture, Water, and Environment, the cost of farmgate milk in Australia is forecast to average 47.9 cents per litre in 2020-21, which is 9% down from high levels in 2019-20. Order products and manage your account online. Get Started Investing It also has a national manufacturing footprint comprising 13 sites. Picture: Kylie Else. While the NXT share price chart over the past couple of months hasn’t looked fantastic, compared to some other technology shares, I saw this as an attractive buying opportunity. In light of this, the deal is expected to be double digit earnings per share accretion in FY 2022. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. Why Zip (ASX: Z1P) shares were on watch Wednesday, Here’s why the Smartgroup (ASX:SIQ) share price is going nuts. Further improvements to pagination, filtering, and including year on announcements are coming. The Zip Co Limited (ASX: Z1P) share price is on watch today after announcing an additional capital to fuel further overseas growth. Patrick has a Bachelor of Business Management / Commerce from the University of Queensland. Lion Dairy acquisition. Usually, you’d want to try and pick up shares in cyclical companies when they’re looking the most beat up. Bega Cheese (ASX:BGA) share price jumps 10% on Lion Dairy & Drinks acquisition Motley Fool Australia. Around 65% of Bega’s revenues are generated domestically. Bega Cheese Limited ( ASX:BGA) has completed the placement and the institutional entitlement offer components of its capital raising program, which was partly announced to fund the acquisition of Lion Dairy & Drinks Pty Ltd. 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. The company made a series of acquisitions over the years and officially became a company in 2008 and listed on the ASX in 2011. Indicative offers for the $500 million-odd Lion Dairy and Drinks – which makes and sells milk-based drinks, yoghurts and juices – landed on Lion and adviser Deutsche Bank's desk a fortnight ago and the … The company will pay $534 million to … Bega told shareholders today it expects the deal to be completed at the end of January 2021. It’s horizontal in the fact that Bega has essentially eliminated a direct competitor that sells similar products. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. By clicking this button, you agree to our Terms of Service and Privacy Policy. About Rewardle Holdings Limited Join our flagship membership service, Share Advisor. In addition to this, Lion Dairy & Drinks has Australia’s largest national cold chain distribution network supplying food service and convenience stores. The Motley Fool has a disclosure policy. Bega has been around since 1890 and originally commenced as a dairy cooperative. The S&P/ASX 200 Index (ASX:XJO) fell on Thursday. This Service provides only general, and not personalised financial advice, and has not taken your personal circumstances into account. Management’s base case is for synergies of $41 million per annum. ASX 200   |   A     B     C     D     E     F     G     H     I     J     L     M     N     O     P     Q     R     S     T     U     V     W     X. Bega’s revenue to double. ... ASX-listed Bega Cheese is understood to have also lobbed a bid and while the ACCC might not … Our top expert's free investment reports are exactly that -- completely free! The sale of the Lion Dairy and Drinks business to ASX-listed food and dairy company, Bega Cheese, has been well received by the company’s largest supplier group, Dairy Farmers Milk Cooperative (DFMC). We’ll never sell your email address. Unsubscribe anytime. The company made a series of acquisitions over the years and officially became a company in 2008 and listed on the ASX in 2011. 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. See how you can find out the name of this stock. Terms, Financial Services Guide, Privacy Policy. Doc and his team have published a detailed report on this tiny ASX stock. An easy and convenient way to place your orders online Sign in. A Bachelor of business management / Commerce from the previous close of fresh fruit from orchards the. 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