Food & Beverage

Australia's Bega Cheese jumps 15% following Vegemite acquisition

A woman holds a jar of Vegemite during a picnic breakfast on the Sydney Harbour Bridge, Australia.
Brendon Thorne | Getty Images

Australia's beloved food spread, Vegemite, is about to get a new local owner: Australian cheese giant Bega Cheese.

In a note to the Australian Securities Exchange on Thursday, Bega Cheese said it will acquire a bulk of U.S. food giant Mondelēz International's Australia and New Zealand grocery and cheese business for 460 million Australian dollars ($344.68 million), which will be funded by bank debt.

Investors cheered the announcement at the stock market, with Bega Cheese shares leading the broader ASX 200 index, closing up 15.2 percent at A$5.16.

The acquisition will include a variety of products including Vegemite, salad dressings from ZoOsh and licensed KRAFT branded peanut butter, processed cheese slices, mayonnaise among others. Bega Cheese would also take over Mondelēz's Port Melbourne factory.

Vegemite is a dark food spread made from leftover brewer's yeast and was developed in 1922 by the Fred Walker Company, which later became Kraft Food Company. It quickly became a breakfast staple among Australians, with more than 300,000 jars produced each day, according to Bega Cheese.

Mondelēz will retain ownership of the Philadelphia brand.

"This acquisition will be value accretive in its own right, strategically important and company making," said Bega Cheese's executive chairman, Barry Irvin, in a statement. "These iconic brands alongside the Bega brand are strong building blocks to enable Bega Cheese to become a great consumer goods business."

From this acquisition, Bega Cheese expects pro forma net revenue of A$310 million and earnings before interest, tax, depreciation and amortization of between A$40 million to A$45 million.

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