Australia's Bega Cheese buys Lion Dairy from Kirin

Kirin is selling Lion Dairy to Australian company Bega Cheese for 560 million Australian dollars ($412 million), the companies said on Thursday.

Under the agreement, Bega is acquiring Lion Dairy — an Australian yogurt, milk and juice company that makes well-known brands such as Yoplait, Dairy Farmers and Big M — in an all cash deal that is expected to close early next year.

The deal comes after Kirin was forced to call off a plan to sell Lion to China Mengniu Dairy in August. That proposed 600 million Australian dollar ($441 million) sale was canceled after the companies said approval from regulators was "unlikely" to materialize.

The deal went south as relations between Australia and China were souring and spilling over into trade.

Back in April, Australian Prime Minister Scott Morrison angered Beijing by calling for an investigation into the origins of the coronavirus pandemic. Since then, lucrative Australian exports to China including wine, beef and barley have faced obstacles from China — including high tariffs, anti-subsidy investigations and lengthy delays clearing customs.

Tensions between the two countries show no signs of easing.

In September, the last two reporters from Australian news organizations in China had to be evacuated after they were aggressively questioned by authorities over a national security case. And earlier this month, China said Australia was to blame for the "sharp downturn" in relations, with a Foreign Ministry spokesman saying all responsibility is on "some people in Australia (who) tend to regard China's development as a threat."

Kirin avoided geopolitical headaches this time around. In a statement announcing the deal, the Japanese company noted that it doesn't need the approval of Australia's Foreign Investment Review Board.

Buying Lion will help consolidate Australia's fractured dairy industry, and realizes "our ambition of creating a truly great Australian food company," Barry Irvin, Bega Cheese's executive chairman, said in a statement.

-- Ben Westcott contributed to this report.