Canterbury-based dairy company Synlait has announced the conditional purchase of Dairyworks for $112 million.
Dairyworks, also based in Canterbury, supplies New Zealand with almost half of its cheese and a quarter of its butter, and also operates the Rolling Meadow and Alpine consumer brands.
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Synlait CEO Leon Clement said the acquisition would provide Synlait with another meaningful move towards the delivery of its 'Everyday Dairy' strategy and complemented the company's recent purchase of cheese manufacturer Talbot Forest.
"This is an exciting opportunity for Synlait. This business is a great strategic fit for us and an important step in growing our presence in the Everyday Dairy category," he said.
"Dairyworks is a nimble and innovative company. It will fit well with Synlait and provides us with an opportunity to keep optimising our value chain while giving access into Australia where Dairyworks presence is growing."
Clement said opportunities existed in both businesses to streamline supply chains and enhance competitiveness.
"It gives us the ability to optimise how we process milk solids and get the most value from our supply of milk. We're excited by this opportunity as we work to capture more value in the dairy market in New Zealand and globally."
Dairyworks would operate as a stand-alone business under the Synlait umbrella, with its CEO, Tim Carter, reporting to Clement.
The sale is subject to Overseas Investment Office approval.