Saputo bid gets boost from Australian regulator

Saputo’s bid to acquire Australia’s oldest dairy processor got a boost Tuesday when a Australian competition agency reiterated its concerns about a rival offer from Murray Goulburn.

MONTREAL — Saputo’s bid to acquire Australia’s oldest dairy processor got a boost Tuesday when a Australian competition agency reiterated its concerns about a rival offer from Murray Goulburn.

In a 76-paged issues paper made public on Tuesday, the Australian Competition and Consumer Commission challenged some of Murray Goulburn’s assertions that there wouldn’t be a negative impact if it acquired Warrnambool Butter & Cheese.

”The ACCC considers that a there is potential for the proposed acquisition to have the effect of lessening competition in the acquisition of raw milk,” said the report, which had parts blacked out.

The commission also questioned whether there would be a positive impact on the volume or value of Australian dairy exports if Murray Goulburn acquired control of Warrnambool.

The agency made similar comments when Murray Goulburn tried to acquire Warrnambool in 2010.

The commission is assisting the Australian Competition Tribunal, which is set to begin hearings on Murray Goulburn’s bid on Feb. 10.

The tribunal could rule by the end of February or take until the end of May to decide.

Murray Goulburn’s offer is conditional on receiving the tribunal’s approval along with it obtaining more than half of Warrnambool’s shares.

The co-operative wants the tribunal to determine that the merger of Australia’s first and fourth-largest dairy processors would be a “public benefit” to the country by significantly enhancing the company’s international competitiveness.

It claims the transaction will result in “substantial” cost savings and efficiency gains without “any meaningful lessening of competition in the market for the acquisition of raw milk or other detriments.”

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