SYDNEY, AUSTRALIA — The Australian Competition and Consumer Commission (ACCC) announced on Sept. 25 that it will not oppose Wilmar and First Pacific’s proposed acquisition of Goodman Fielder Limited.
Wilmar and Goodman Fielder overlap in the supply of packaged edible oils to Australian retailers and, in particular, in the supply of vegetable oils including canola, sunflower and soybean oil.
At the end of April, First Pacific and Wilmar submitted a non-binding all-cash offer for the joint acquisition of all of the shares in Goodman Fielder via a scheme of arrangement at A$0.65 per share, valuing the shares at A$1.27 billion. The bid was raised to A$0.70 per share, valuing Goodman Fielder at A$1.37 billion. It is this revised offer that Goodman Fielder’s board unanimously recommended.
Goodman Fielder is the largest supplier of branded packaged edible oils to retailers with brands including Crisco and Gold’N Canola. Wilmar supplies imported packaged oils, which supermarkets sell under their private labels. The ACCC’s public review focused on whether, as a result of the proposed acquisition, Wilmar and/or Goodman Fielder would be able to raise the prices of packaged vegetable oils.
“The ACCC determined that, following the proposed acquisition, Wilmar and Goodman Fielder would continue to be competitively constrained by alternative existing and potential suppliers,” ACCC Chairman Rod Sims said. “Packaged vegetable oil can be readily imported from international suppliers. Wilmar currently supplies oil from its offshore facilities and there are other international suppliers capable of supplying the Australian market.
“Industry feedback also suggested that packaged vegetable oil is considered a commodity product with low levels of brand loyalty, making it easier for retailers to bypass their existing suppliers.”
The ACCC also determined that the proposed acquisition was unlikely to raise competition concerns in any other markets in which Goodman Fielder or Wilmar are active.
First Pacific is the main holding company of the Salim Group. Its major investments include the Indofood business in Indonesia, a ranking noodle maker, and its Bogasari milling subsidiary.
Goodman Fielder is the leading listed food company in Australasia with such iconic brands as Medow Lea, Praise, White Wings, Pampas, Mighty Soft, Helga's, Wonder White, Vogel's (under license) and Meadow Fresh.
Wilmar is Asia’s leading agribusiness group and one of the largest companies listed in Singapore. Hong Kong-listed First Pacific is a leading investment management and holding company with most of its operations in Southeast Asia.
The joint venture comes two years after Goodman Fielder sold its Champion flour milling business in New Zealand to Nisshin Flour Milling Inc. and its parent, Nisshin Seifun Group Inc. for NZ$51 million. At that time, Goodman Fielder CEO Chris Delaney said net proceeds of the sale to Nisshin would be used primarily to repay debt and further strengthen Goodman Fielder’s balance sheet.