Chinese dairy companies have lost an opportunity to leverage international resources, and Murray Goulburn may also miss the chance to accelerate in China, the most promising dairy market. The Australian dairy company Murray Goulburn, which attracted many Chinese dairy companies to bid, ultimately fell into the hands of a Canadian dairy company, but this may affect its acceleration in China, the most promising dairy market. On October 27, Australian media reported that the debt-laden Murray Goulburn Co-Operative Co. Limited would be sold to Canadian dairy company Saputo for A$1.31 billion (RMB 6.65 billion), a premium of about 76-84%, exceeding market expectations. The transaction is still subject to approval by Murray Goulburn shareholders and Australian regulators, and is expected to be completed in the first half of 2018. The completion of the deal also means that Chinese bidders have collectively lost out. The auction of Australian dairy company Murray Goulburn attracted much attention in the Chinese market, not only because it is one of Australia's largest dairy companies and one of the world's largest raw material suppliers, but also because Chinese dairy companies such as Yili and Mengniu participated. On September 20, The Australian, citing sources, reported that well-known Chinese dairy companies including Yili, Mengniu Dairy, and China Resources Ng Fung participated in the bidding for Murray Goulburn. That evening, Yili issued an emergency announcement stating that it had indeed submitted a strategic development plan, but there were still many uncertainties. Later, Mengniu also announced its participation. Some industry insiders analyzed that the acquisition was still in a non-public stage but was publicly exposed, possibly deliberately done by certain investment institutions to raise the price of the acquisition target. Generally, the intermediary fee for an asset acquisition is about 3%-5%, and the higher the price is hyped, the more the intermediary can profit. But for the companies exposed, it does cause some trouble in the acquisition. Although Murray Goulburn has a certain reputation, it also faces considerable performance pressure. According to Murray Goulburn's last fiscal year results, sales fell 10.3% to A$2.49 billion (RMB 13.1 billion), with a loss of A$371 million (RMB 1.96 billion). Earlier reports confirmed that it would close three factories and cut 360 jobs by early 2019. If one departs from the intrinsic value of the target, acquiring for the sake of acquisition is clearly irrational. For Saputo, "the acquisition of Murray Goulburn will add to and complement Saputo's dairy division (Australia) business." Although Canada's Saputo is not well-known in the Chinese market, it is the 9th largest dairy company among the global top ten, and its development path is mainly through mergers and acquisitions. In early 2015, Saputo completed the acquisition of Warnambool Cheese and Butter (WCB), one of Australia's largest dairy companies, and then launched a bid for the "Daily Cheese" business of its Australian competitor Lion Dairy and Drinks (LDD). The acquisition of Murray Goulburn reflects its commitment to expanding its business in the Australian market. Murray Goulburn Chairman John Spark said that through the WCB acquisition, Saputo has proven to Australian dairy farmers that it is a reliable and trustworthy partner. But for Murray Goulburn, losing the opportunity to cooperate with Chinese dairy companies may also affect its growth in China, the most promising dairy market. China's two-child policy and the growth in dairy consumption driven by consumption upgrades make it one of the most important dairy markets, and major dairy companies are increasing their investment in the Chinese market. Chinese dairy companies with mature markets and channels in China would greatly help it further open up the Chinese market. Murray Goulburn established a wholly-owned subsidiary in Qingdao in 2007 to sell infant formula, and the so-called "internet-famous" Devondale milk powder still mainly relies on cross-border e-commerce platforms. Dairy expert Song Liang believes that Canada's Saputo will have limited help for Murray Goulburn's business expansion in China. On the contrary, if sold to companies like Yili or Mengniu, with their channels, it could quickly solve its inventory problems in China, and financial problems would be correspondingly resolved, and the development in the Asia-Pacific market could help Murray Goulburn grow faster. Murray Goulburn falling into the hands of a Canadian company means that Chinese dairy companies have lost an opportunity to accelerate internationalization. Australia's high-quality, low-cost milk sources and the brand's own popularity are beneficial supplements for domestic dairy companies. However, even if this opportunity is lost, it cannot stop the internationalization of Chinese dairy companies. In recent years, domestic dairy companies have either built factories overseas, set up R&D centers, or acquired milk sources, utilizing overseas resources through various channels. It is reported that the second phase of Yili's infant formula project in New Zealand has been put into production, and Feihe's infant formula factory in Kingston, Canada, started construction in June this year. Earlier, Synutra and Yashili also built factories in France and New Zealand, respectively. Although overseas acquisitions are fraught with difficulties due to various uncertainties, the Chinese market has already given rise to dairy companies like Yili and Mengniu that have entered the global top ten. Given the strategic plans of Chinese dairy companies, it is foreseeable that they will continue to seek suitable resources. The 2017 (3rd) FMCG + Internet Conference will be held in Chongqing in November 2017. The conference will closely focus on the theme "New Forces, New Ecology" and invite 1,000+ distributors, 500+ brand owners, 200+ B2B platform founders, and 100+ investment and financing institutions to jointly explore new chapters of cross-border integration! Click the links below to review the highlights of the first and second FMCG + Internet Conferences: 2016 "FMCG + Internet" Summit Forum -END-