Murray Goulburn's Shareholders Approve $1 Billion Takeover by Saputo

The Murray Goulburn manufacturing facilities in Rochester, Australia, May 3, 2017.
( AAP/Tracey Nearmy/via REUTERS )

Murray Goulburn shareholders approved on Thursday a $1.0 billion takeover of the co-operative by Canada’s Saputo Inc, bringing the sale of Australia’s largest dairy processor close to completion.

Nearly 98 percent of Murray Goulburn shareholders voted to approve the sale, it said in a statement. The deal now only requires approval from Australia’s Foreign Investment Review Board.

A sale of Murray Goulburn will end a tumultuous two years for the dairy co-operative that began after an ill-fated partial listing in 2015. It posted record losses after overpaying for milk supplies in order to produce more high margin products such as infant formula and suffering poor Chinese sales.

The backing of shareholders was widely expected after the Australian dairy processor warned last month it would breach its financial covenants if a takeover did not occur, leaving the farmer-owners little choice but to back the deal.

A sale will establish the dominance of two international dairy giants in Australia, the world’s third largest dairy exporter, amid intense competition to tap growing Asian demand.