Dairy processing company, Synlait (ASX:SM1) is set to purchase Dairyworks for $112 million, subject to Overseas Investment Office approval.
Dairyworks currently supplies New Zealand with almost half of its cheese and a quarter of the country’s butter. This follows the recent acquisition of cheese manufacturer, Talbot Forest.
Dairyworks will continue to operate as a stand-alone company under the direction of CEO, Tim Carter, who will now report in to Sinlait CEO Leon Clement.
Mr Clement says “opportunities exist in both businesses to streamline supply chains and enhance our competitiveness. It gives us the ability to optimize how we process milk solids and get the most value from our supply of milk.”
Shares in Synlait (ASX:SM1) closed 1.73 per cent lower at $9.10 yesterday.