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Why Bega Cheese Ltd (ASX:BGA) shares are up 5% today

Credit: Steel Wool

Shares in Bega Cheese Ltd (ASX: BGA) are up 5% today after the company announced the $250 million acquisition of the Koroit Facility in Victoria which is owned by Murray Goulburn.

Murray Goulburn are now owned by Canadian listed dairy company, Saputo Inc.

Whilst the transaction is subject to approval by the ACCC, this is not expected to be an issue as the ACCC is understood to be quite keen to get a competitor in the region and provide farmers with options of where to sell their milk.

The Koroit Facility has 108 employees and Bega Cheese expects the facility to generate $20 million in annual EBITDA (assuming the current intake of 300ML), although the company also warned that it may take up to three years for the facility to be fully integrated.

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Motley Fool contributor Kevin Gandiya has no position in any of the stocks mentioned.

You can find Kevin on Twitter @KevinGandiya.

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