Mayors believe Lion's sale is a positive sign

King Island and Burnie mayors back sale of Lion cheese business to Saputo

Australian Dairyfarmer News
SOLD: Saputo is buying Lion's Dairy & Drinks (LDD) specialty cheese business, including the King Island Dairy and Cheese Store.

SOLD: Saputo is buying Lion's Dairy & Drinks (LDD) specialty cheese business, including the King Island Dairy and Cheese Store.

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Tasmanian mayors in King Island and Burnie say the sale of Lion's specialty cheese business is a positive for their regions.

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King Island and Burnie mayors have shown their support for the $280 million Lion's Dairy & Drinks (LDD) specialty cheese business sale to Saputo Dairy Australia.

The sale will include the manufacturing assets at Burnie (The Heritage) and King Island (King Island Dairy and Cheese Store), and the two Lion-owned farms on King Island (Horizon Glen and Kyeema).

King Island mayor Julie Arnold said the sale was a positive sign for the future.

"I think they (Saputo) are very experienced in specialty cheese making and they have brought other Australian assets, so they clearly do their research in relation to the Australian market. The King Island brand itself has substantial value...

"Our King Island brand is an absolute mainstay of our economy, and we will assist in any way we can and organise to help it strengthen the already high brand."

Burnie mayor Steven Kons said it was a "good opportunity for Saputo to purchase Lion".

"They are good operators. They know what they are doing. They have got an international footprint. I think that it will go from strength to strength and there will be a lot more export opportunities for this facility.

"Lion made the strategic move to move out of cheese. I've had a look at the financials, and the write-down certainly means that Saputo has purchased a great asset at a considerably lower price than what they probably would have factored into."

In April, Kirin and Lion assessed the fair value. The recent impact of extreme weather on the cost and availability of milk, combined with discussions with bidders to date in the sale process, led Lion to recognise a non-cash write-down of the carrying value of Dairy & Drinks, including the cheese business.

Article first appeared on Tasmanian Farmer

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