Bega Cheese is offering nearly $12 million to take over Queensland peanut grower Peanut Company of Australia (PCA) to give the dairy processor new supplies of Australian-grown peanuts for its own peanut butter operations.
Bega is seeking to become a broader food company and in July finalised the purchase a suite of food products, including Vegemite and Kraft peanut butter from global food giant Mondelez International.
"The acquisition of PCA will help grow the supply of Australian-grown peanuts for the manufacture of peanut butter at our Port Melbourne factory and supply to other PCA customers," Bega chairman Barry Irvin said on Friday.
"We have plans to increase the domestic supply of peanuts by working with farmers to expand peanut plantings and production."
PCA is a public unlisted company located based in Kingaroy in Queensland, Australia's peanut capital.
Bega said PCA has been Australia's leading supplier of locally grown peanuts to domestic and overseas customers for more than 90 years.
Under the takeover offer, Bega will acquire a 19.99 per cent stake in PCA for $1.9 million, and then make an unconditional $10 million takeover bid to acquire all the shares not already held by Bega.
Peanut butter has generated news at Bega lately.
Bega Cheese and global food company Kraft-Heinz are currently involved in legal action over who has rights to the design of a peanut butter container.
The dispute follows Bega's acquisition of Kraft peanut butter from Mondelez International - a deal that allowed Bega 12 months to use the Kraft peanut butter brand.
Dispute has now arisen over which company has the rights to the design of the yellow-lidded-and-labelled jar used for Kraft peanut butter prior to the deal, and used by Bega for its recently introduced Bega-branded nut spread.
Kraft-Heinz has taken the matter to a New York federal court, alleging Bega could not use Kraft's peanut butter jar design.