Vegemite will soon be owned by an Australian company once more, with Bega Cheese revealing plans this morning to buy most of Mondelez International’s Australia and New Zealand grocery business.
In a note to the Australian Securities Exchange, Bega says it has agreed to buy a number of products, including spreads and cheese lines using the KRAFT brand licence, as well as Vegemite, ZoOsh and Bonox, for $460 million.
The purchase will be made from bank debt, with Bega saying it has “near term corporate opportunities to pay down debt”.
“The acquisition will be value accretive in its own right, strategically important and company making,” Bega’s executive chairman Barry Irvin said this morning.
In the first hour of trade this morning, Bega’s share price jumped 11.5% on the news.
Entreprenuer and owner of rival spread OzEmite, Dick Smith, told AAP he welcomed the news Vegemite would be returning to Australian ownership, saying he had contacted Mondelez a number of times to discuss bringing the product home.
In notes for shareholders, Bega highlights that the Mondelez International grocery business holds 31% of the $550 million “spreads” market in Australia, with the business including Vegemite and KRAFT spreads like peanut butter, nut spreads and “ambient cheese spreads”.
Bega believes the deal will add value to its existing operations, as well as bringing new talented personnel on board through the deal.
“In addition to Vegemite and the other brands being undeniably iconic, the people we are taking on are very impressive and will play an important role in growing the business,” Irvin said.