One of Australia's best known cheese brands, COON, is about to change from Japanese to Canadian ownership.
Warrnambool Cheese and Butter Factory, which is majority-owned by Canadian dairy giant Saputo Inc, is set to acquire the everyday cheese business of Lion Dairy and Drinks for $137.5 million.
The everyday cheese business includes the cutting and wrapping, distribution, and sales and marketing of the COON, Cracker Barrel, Mil Lel and Fred Walker brands.
Lion Dairy and Drinks is part of Japanese beverages and pharmaceuticals giant Kirin Holdings.
COON cheddar cheese has been manufactured in Australia since 1935 and was originally made by Kraft.
The brand is named after Edward William Coon who developed the "cooning process" of cheese making.
"The transaction will enable Warrnambool Cheese and Butter to increase its presence in consumer branded everyday cheese products segment in Australia, with strong market positions in this segment," Warrnambool said on Monday.
The everyday cheese business generates annual sales of about $160 million.
Lion Dairy and Drinks said the everyday cheese business was performing very well in the market, but Lion wanted to focus on higher-value categories such as milk-based beverages, specialty cheese and yoghurt.
The cut-and-wrap operations of the everyday cheese business are located in a building owned by Warrnambool which is next to its cheese making facility at Allansford in Victoria.
Lion said Warrnambool had indicated that it will run the cut-and-wrap facility as a going concern and retain the staff of about 170 employees.
The acquisition is subject to approval by Warrnambool shareholders under sharemarket listing rules on related party transactions.
Lion holds just over 10 per cent of the shares of Warrnambool Cheese and Butter.
Canadian dairy giant Saputo holds a stake of 87.92 per cent of Warrnambool shares.
Warrnambool said Saputo had advised that it would vote in favour of the acquisition.
Warrnambool shares gained 10 cents to $8.30.
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