By LIAM DANN
New Zealand jobs look likely to go if Fonterra succeeds in its $1.5 billion takeover bid for Australian dairy company National Foods.
Fonterra has already indicated redundancies are likely in Australia if it gets control of National Foods.
But in a revised version of its bidder's statement - released
to the NZX yesterday - the giant dairy cooperative raises the possibility of rationalising operations on this side of the Tasman.
A paragraph added to the formal bidder documents says Fonterra may integrate the manufacturing operations of its Palmerston North factory at Longburn and the National Foods factory at Highbury because they are close to each other.
The National Foods operation is run by a subsidiary called International Fine Foods. It has between 40 and 50 staff and manufactures the Yoplait yoghurt brand in New Zealand. Fonterra seems unlikely to close its own Longburn factory.
A Fonterra spokesperson said yesterday it was too early to quantify the possible effects of integration - especially when Fonterra was yet to look at National Foods' operations.
Fonterra launched its bid for National Foods - Australia's largest listed dairy company - late last month.
It has offered A$5.45 a share for 100 per cent of the company. National Foods directors have rejected the bid, saying it undervalues the company.
Buying National Foods is part of a strategy to enter the chilled milk and yoghurt market in Australia. It will strengthen Fonterra's Australasian base in branded consumer foods and provide a platform for further growth in the Asian market.
Australian food-industry analysts have suggested that Fonterra may need to raise its bid by up to 5 per cent to convince shareholders to sell.
There is a belief in Australia that Fonterra could find up to $50 million in synergies by integrating parts of its existing Australian business with National Foods.
In its original bidder's statement, Fonterra raises the possibility of redundancies in Australia due to the likely merger of head offices.
Yesterday's revised statement suggests that if Fonterra gets only majority control of National Foods it may consider selling some or all of its Australian operations to National Foods. But the same paragraph points out that a number of commercial factors make this unlikely.
