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Lion announces sale of Dairy & Drinks division

Lion announces sale of Dairy & Drinks division

Lion is selling its Dairy & Drinks division (LDD) to finance the expansion of its craft beer and fine wine business internationally.

Lion CEO, Stuart Irvine said: “Following careful consideration, we believe a sale of LDD is the best option to set both Lion and LDD up with the capital and resources needed to grow into the future.

"It’s clear from the further work done in recent weeks that LDD’s strategy to more fully leverage growing consumer wellness trends will require new capabilities and capital investment. The sale process will focus on finding the right owner to take LDD forward and unlock its full potential.

"The remaining Lion business has a number of avenues for growth available and the decision to sell LDD will realise the capital needed to accelerate investment behind these."

“Our Lion Global Markets (LGM) business has made great progress with Little Creatures now available in 30 global cities, the acquisition of the Fourpure craft beer brand in the UK and continued growth in our fine wine business in North America. We intend to back LGM to explore further opportunities in high growth craft beer markets world-wide.” 

The company noted that it has taken early steps in building a portfolio of premium, crafted non-alcohol beverages alongside its core beer brands.Recent investments in hot beverages like Schibello coffee in Australia and Good Patron in NZ are "showing promising early signs".

Lion will continue to explore opportunities in growing high margin categories in both alcohol and non-alcohol adjacencies, with a view to nurturing and growing other craft beverage brands.

Buyers already circling Lion Dairy & Drinks

The sale process for LLD will commence immediately and Deutsche Bank has been appointed as the investment bank coordinating the sale process and King & Wood Mallesons as legal adviser. Greenhill & Co Australia has been appointed as independent financial adviser.

According to the Australian Financial Review, Lion has already received unsolicited approaches from potential buyers during the strategic review and will now formally engage with interested parties.

It notes: "Potential buyers include Coca-Cola Amatil, which last week snapped up a stake in functional beverages business Made Group in partnership with The Coca-Cola Co, Parmalat, and private equity investors."

Lion advised that any sale of LDD will not impact Lion’s alcohol businesses in Australia and New Zealand.