Coles Group Acquires Two Automated Milk Processing Facilities

On 03 April 2023, Coles Group Limited (ASX: COL) entered into a binding agreement to purchase two automated milk processing facilities from Saputo Dairy Australia at a cost of around AU$105 million. These facilities, situated near Coles' distribution centers in Laverton North and Erskine Park, have the capability to process roughly 225 million liters of milk every year, mostly for Coles Own Brand 2L and 3L milk. Coles CEO, Steven Cain, said that the acquisition would improve milk supply security and supply chain resilience, while also providing capacity for future growth opportunities through new product innovation.

The acquisition will complement Coles' existing investments in Own and Exclusive brand portfolios and manufacturing capabilities in convenience meals and meat. Coles has committed to offering employment contracts to SDA site-based employees at both milk processing facilities. The acquisition will be financed using Coles' existing debt facilities and is anticipated to surpass investment return targets within three years. However, the acquisition is conditional upon the approval of the Australian Competition and Consumer Commission (ACCC) and the fulfillment of other customary closing conditions.

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