Megmilk Snow Brand offers to acquire dairy assets from Beston

AUSTRALIA – Australia’s Beston Global Food Company (BFC) has confirmed that Japan’s Megmilk Snow Brand Co. has made an offer to acquire some of its key dairy assets.

Specifically, Megmilk Snow Brand has expressed interest in BFC’s cheese and lactoferrin production business located in Jervois, South Australia. 

The deal, which is still in its early stages, is subject to regulatory and shareholder approvals. 

In addition, financial terms are yet to be disclosed, but given the importance of BFC’s dairy operations and Megmilk Snow Brand’s history of strategic acquisitions in Australia, the transaction could have significant implications for both companies.

The development follows BFC’s announcement in July that it was in discussions with various parties regarding its dairy units, and it now seems poised to move forward with Megmilk Snow Brand as a potential buyer.

In a statement issued in response to media reports, BFC clarified that Megmilk’s offer is non-binding and includes several components subject to conditions, such as approvals from banks and shareholders. 

The Australian dairy firm has indicated that it is working through these conditions with Megmilk Snow Brand to gain a clearer understanding of the total purchase price and other critical details. 

The Japanese dairy giant, listed on the Tokyo Stock Exchange, has a market capitalization of US$ 1.13 billion and has a history of acquiring dairy companies in Australia over the last three decades.

Megmilk Snow Brand’s existing assets in Australia include the Unicorn Cheese Company in New South Wales, an infant formula packaging facility in Tatura, and the Udder Delights business.

The company has extensive operations not only in Japan but also in Taiwan, Indonesia, China, Hong Kong, Malaysia, and the United States. 

It has also announced plans to expand into Vietnam, with a cheese processing plant under construction in Ho Chi Minh City.

The potential sale of BFC’s dairy assets to Megmilk Snow Brand comes amid financial challenges for the Australian company. 

In July, BFC highlighted that it had been facing difficulties due to a rebound in Australian milk production following a historic low in 2023, the lowest output in 30 years. This unexpected increase in milk production has put a strain on BFC’s production capacity. 

Additionally, BFC pointed out that the situation has been further complicated by an influx of dairy imports into Australia throughout 2023 and early 2024, increasing competition across retail, bulk ingredients, and foodservice channels.

BFC is the largest dairy company in South Australia and the seventh largest in Australia. Its business has long been focused on producing and exporting premium dairy products, particularly cheese and lactoferrin, the latter being a protein with immune-boosting properties that is in high demand globally.

However, the company has had to navigate a challenging environment due to market pressures and the global dairy trade.

As BFC has only named one specific production facility in the deal with Megmilk Snow Brand, questions remain regarding what other businesses might remain after the transaction is completed. 

Beston has yet to provide details on which additional assets, if any, will be retained or sold, leaving stakeholders seeking further clarification.

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