Saputo has agreed to sell its cheese processing plant in Koroit, Australia to Bega Cheese for approximately AUD250 million ($184 million), in order to satisfy concerns raised by the Australian Competition and Consumer Commission (ACCC).

In May, the ACCC claimed that Saputo’s $1 billion purchase of Murray Goulburn could drastically reduce competition for milk in south-west Victoria and south-east South Australia, as the company’s milk processing sites would account for over two-thirds of the raw milk processing capacity in the region.

This sale should address these concerns – though the deal is subject to approval from the ACCC – and Saputo claims that the deal should close in the second fiscal quarter of 2019.

Bega Cheese says that the purchase will significantly strengthen its milk processing operations, and suggested that it could further expand the production capacity of the facility in the future.

The company also claimed that all 108 employees currently working at the site would retain their positions once the transaction was completed.

Bega Cheese executive chairman told ABC news: “We’re buying a facility in a really strong dairy area where we have been collecting milk for almost 10 years, so this cements our presence there.

“And it does so with a very good quality facility, so we’re very pleased to be successful in making that acquisition.

“We will be hoping and encouraging farmers to come across and become Bega suppliers, but as part of this deal there is a milk supply guarantee from Saputo that a portion of supply will be from them.”