SPC’s Shepparton facility will provide extra manufacturing power for OJC to meet rising demand, and will help it expand from its current supermarket-only channels into petrol stations, convenience stores, food service, and more.

Roughly 95 per cent of Nature One Dairy’s products are sold predominantly in pharmacies in Asian markets across 13 countries. The other two businesses hope to leverage this expertise.

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“The three businesses blend in beautifully and the synergies and what they provide is sensational, really, and it gives a defensible portfolio to what is a really challenging market out there in food and beverage,” OJC chief executive Steven Cail said.

SPC, which recently took part in a campaign along with Sanitarium, Norco and Mayvers to push for country-of-ownership labelling on Australian food products, had to pull back its production of canned fruit by 40 per cent earlier this year due to lower demand for Australian-grown pears and peaches as consumers increasingly opt for cheaper foreign-made items amid cost-of-living pressures.

The merger is expected to generate $400 million in revenue and more than $29 million in earnings.

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“This is about becoming a big, defensible company that can buy from Australian growers and supply Australian food into Australia, but also look at a bigger portfolio beyond,” Cail said.

SPC shareholders are expected to own 69.2 per cent of the merged entity, OJC shareholders will hold 15.5 per cent and Nature One Dairy shareholders will own 15.3 per cent. OJC will issue 133 million shares to SPC shareholders and issue 29 million shares and pay $6 million cash to Nature One Dairy shareholders to acquire it.

The combined company is also conducting a limited capital raising of $1 million to give potential investors the opportunity to capitalise on the transaction, said OJC’s Cail.

The transaction will require the approval of OJC’s shareholders, who will vote on the merger at an extraordinary general meeting in November. If passed, the new entity will relist on the stock exchange under the ticker “SPG”, which stands for SPC Global.

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