China Mengniu buys drinks business in Australia as dairy producer steps up overseas expansion
- Chinese dairy producer to pick up Lion Dairy & Drinks’s milk, yogurt and juice products from Kirin for 45.6 billion yen (US$419 million)
- Deal adds to acquisition of organic infant milk producer Bellamy’s Australia in September
China Mengniu Dairy has agreed to buy the Australian beverage unit of Japan’s No. 2 brewer in its second major acquisition in the continent this quarter.
Mengniu will pick up Lion Dairy & Drinks’s milk, yogurt and juice products for 45.6 billion yen (US$419 million), while Kirin Holdings will retain the beer, wine and spirits business, they said in a statement Monday. The deal is expected to close in the first half of 2020.
China has been seeking to boost the industry and restore confidence after a milk scandal in 2008 killed six children and poisoned 300,000 others. The government earlier this year said it will support domestic dairy producers in overseas ventures and encourage foreign dairy firms to invest in China, while tightening regulations on imports and online sales platforms.
Kirin started the sale process for its Lion Dairy & Drinks business last year after selling off its Australian cheese business to Saputo Inc. of Canada, to focus on high-margin alcoholic beverages and premium non-alcoholic drinks. Globally, it is pushing into craft beer and personal well-being products from preservative-free skincare to healthy drinks. Last week, the brewer agreed to buy New Belgium Brewing, an independent brewery and maker of Fat Tire Ale, for an undisclosed sum.