MG sale to Saputo is complete

MURRAY Goulburn has been officially sold to Saputo.

The former co-operative announced the completion of the transaction on Tuesday, noting the new constitution approved by shareholders would take effect, and several executives had resigned.

The $1.3 billion sale to the Canadian conglomerate includes all Murray Goulburn brands and facilities, except for the factory in Koroit, the subject of an ACCC decision.

Local farmers have been looking forward to the closure of the sale, and the expected increase in farmgate milk prices to $6 per kilogram of milk solid.

A media release from Saputo said the acquisition of the co-operative would “add to complement the activities of the company’s dairy division”.

“By acquiring a well-established industry player, Saputo reinforces its commitment to strengthen its presence in the Australian market,” it said.

“The company intends to continue to invest in its existing Australian platform and contribute to the ongoing development of its domestic and international business.”

MG chair John Spark wrote in a letter to suppliers that the co-operative was expected to be wound up after litigation was concluded.

“The Saputo transaction received the resounding support of MG suppliers at the extraordinary general meeting, as well as the unanimous support of the board,” he wrote.

“Saputo has demonstrated itself as a credible and trusted processor in Australia, providing us with confidence that it will honour its commitments to suppliers going forward.

“I would like to thank you for your milk supply to MG over the period of your association with the co-operative and your contribution to the development of its operations.

“In many cases this is a multi-generational relationship and I realise that you may be feeling a mixture of emotions with these developments.

“This is undoubtedly a significant day in the history of MG — a time to reflect not only on the achievements and successes of the past, but to look to the future with hope and excitement for the opportunities ahead on joining one of the world’s largest and most successful dairy companies.”

Suppliers will receive an initial distribution of 80 cents per share or unit as a capital return from the proceeds of the Saputo transaction, and qualifying suppliers will receive a backpay amount of 40 cents per kilogram milk solids for all qualifying milk solids supplied between July 1 and October 31 2017, on May 15 — this will also apply to suppliers that have genuinely retired — and a retention payment of 40 cents per kilogram milk solids for all milk supplied in the 2018 financial year will be paid on August 15.

“I hope these payments will help to support suppliers particularly affected by the very dry conditions over recent months,” Mr Spark wrote.