Dairy company, Bega Cheese (ASX:BGA) is planning to snap up the Koroit dairy processing plant from Saputo Dairy Australia.
The purchase price is $250 million, which will be funded by new and existing debt facilities. The transaction is subject to ACCC approval.
Bega says, the Koroit plant would generate annualised earnings of around $20 million based on the present intake of 300 million litres.
Saputo offered to sell the plant prior to its takeover of Murray Goulburn, to remedy ACCC concerns about competition in the raw milk market.
Shares in Bega Cheese (ASX:BGA) are trading up 2.6 per cent to $7.90.