Global buyers sweet talk Bundaberg Sugar, owners start $600m auction

afr.com:

Australia’s investment banking scene is about to get a sugar hit.

Street Talk can reveal the owners of one of the country’s best-known supermarket brands, Bundaberg Sugar, have hired two banks to run a buyer search in what could be one of the biggest deals of the year.

Belgian-based sugar giant Finasucre, which has controlled the Queensland business for more than two decades, is understood to be considering a sale, tapping Lazard Australia’s Campbell Ray and Kidder Williams’ Tim Faulkner to find a buyer. The business is expected to generate earnings before interest, tax, depreciation and amortisation of around $25 million next year, and is slated to fetch a value around the $600 million mark.

Sugar cane is a source of green energy with the crop being primary feedstock for ethanol. Gregory Heath

Bundaberg Sugar is Australia’s largest cane grower and the only fully integrated sugar business with significant land, water, milling and refining operations. It owns one of the largest land and water portfolios in the highly sought-after Bundaberg region with 13,000 hectares of highly productive agricultural land and 38,000 megalitres of water entitlements.

The decision to put Bundaberg Sugar on the auction block comes after Finasucre received inbound interest in the assets, understood to have come from those eyeing it as a source of green energy. While Bundaberg is a crucial supplier of refined sugar in the domestic sugar market, its sugarcane is a primary feedstock for ethanol, among other green fuels.

Aviation giants, including Qantas, have been sweet on Queensland’s sugar cane industry for several years as a way to meet emissions targets. Byproducts from sugarcane can be turned into sustainable aviation fuel, known as SAF.

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