Japan's Kirin has sold its Lion Dairy business in Australia after an earlier A$600 million ($442 million) sale to a China group was ended by diplomatic and trade tensions between China and Australia.
The Japan brewer said Thursday it agreed to sell Lion Dairy & Drinks, Australia's second-biggest milk processor, to Bega Cheese - a local dairy company.
Josh Frydenberg, Australia's treasurer, told state-owned China Mengniu in August that the takeover of some of the nation's biggest milk brands wouldn't go ahead.
Hans Hendrischke, professor of China business at the University of Sydney Business School, told Financial Times on Thursday there was a risk the intervention by the Australian government would be seen as a tit for tat response to rising trade tensions.
Bega beat competitors including Canada dairy company Saputo and Tanarra Capital, an Australian private equity group.
The sale ends Kirin's involvement in the Australia dairy market. It bought National Foods - later renamed Lion - for A$2.8 billion in 2007 and Dairy Farmers the following year for A$884 million.
Bega executive chairperson Barry Irvin said the combined businesses would generate annual revenue in excess of A$3 billion.
"It's obviously a hugely significant acquisition and a huge step forward for the company in terms of creating that scale-sized branded food company," he said.
Chief executive Paul van Heerwaarden said the deal would allow Bega to take advantage of growth opportunities in international and domestic markets.
Lion said the sale was unconditional, required no further regulatory approvals and was expected to be completed in early 2021.
"The sale will see Bega, as an established dairy and food company with more than 120 years of heritage, well placed to drive the business forward given its deep dairy capabilities and strong commitment to Australia brands and the local dairy industry," said Lion chief executive Stuart Irvine.
Irvine said the deal was an important step forward for Lion, and would enable continued investment in priority categories of core beer, craft beer and seltzer in the Australian market and international markets.