July 17, 2018 / 11:43 PM / a year ago

UPDATE 1-Australia's Bega Cheese to buy Saputo dairy plant for $184.5 mln

(Adds background, details, CEO quote)

July 18 (Reuters) - Australia’s Bega Cheese Ltd said on Wednesday it has agreed to buy a dairy processing facility at Koroit in Victoria state from Saputo Inc’s local arm for A$250 million ($184.5 million).

The deal comes four-and-a-half months after Canada’s Saputo said it was discussing plans to sell the milk plant to address concerns from Australia’s competition watchdog about its buyout of Murray Goulburn Co-operative.

At the time, the Australian Competition and Consumer Commission (ACCC) said the Murray Goulburn deal may leave some Victorian farmers little choice when selling their milk.

Bega Cheese Chief Executive Paul van Heerwaarden said the facility, which has 108 employees, would provide Bega with a significant presence in western Victoria and support the growth of its core dairy business.

Bega expects the facility to generate annualised core earnings of A$20 million at the current annual intake level but cautioned that it may take until fiscal 2021 for it to be fully integrated. ($1 = 1.3548 Australian dollars) (Reporting by Aaron Saldanha in Bengaluru; editing by Richard Pullin)

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