Bega will buy most of US-based Mondelez International’s Australia and New Zealand grocery business, which includes Vegemite, ZoOSh salad dressings and Bonox.
The iconic spread, which symbolises nationalism to many Australians, is an important acquisition for the dairy company.
“The wonderful heritage and values that Vegemite represents and its importance to Australian culture makes its combination with Bega Cheese truly exciting,” said Bega executive chairman Barry Irvin.
Bega will also obtain the right to use the Kraft brand under licence to manufacture products such as nut spreads and processed cheeses. The company will also produce the Dairylea and Snackabout brands under licence in Australia and New Zealand, thereby diversifying into markets beyond cheese. The Port Melbourne site, where 300,000 jars of Vegemite are produced every day, will also be transferred to Bega in the deal.
Mondelez International’s Australia and New Zealand branch controls 31% of the $550 spreads industry in Australia, a significant share for a single company. Bega believes that this deal will “enable Bega Cheese to become a great consumer goods business,” in the words of Irwin.
Bega Cheese will fund the deal with bank debt, and expects that the acquisition will be finalised in the first half of this year.