Fonterra has confirmed it is buying a stake in an Australian dairy company for $AUS46 million.
The dairy co-operative has bought a 6% shareholding in Bega Cheese. The 9.3 million shares were purchased at the price of $AUS4.95 per share.
That is a 12% premium on the stock's close on Thursday night at $4.41.
Fonterra, which already has a long-standing commerical relationship with Bega, wanted to buy mores shares, but can't own more than 10 percent of the company under Bega's own rules.
The purchase came just hours after Australia's corporate regulator gave Bega approval to take over the Warrnambool Cheese and Butter Company
The Warrnambool company is the target of a three-way takeover battle between Bega, the Murray Goulburn dairy co-operative and Canadian campany Saputo.
And last week Lion Nathan owned by the Japanese company Kirin, bought a 10% stake in Warrnambool.
Fonterra chief executive Theo Spierings says Australia is an important market for the dairy firm, and it is committed to increasing its presence there.
He says there has been a lot of consolidation activity in the Australian dairy industry and it is important that Fonterra participates.
Fonterra's Australian business went through a reshape in the last financial year which weighed on the company's operating profit in 2013.
