The Australian government on Tuesday said that it would permit Canada's largest dairy producer Saputo Inc. to bid for Warrnambool Cheese and Butter Factory Holdings Ltd. Australia's move was aimed at consolidating its dairy industry amid growing global demand, a Reuters report said.

Saputo raised its bid for WCB by 14% to AUD449 million (USD420 million) last month, beating initial offers made by the dairy company's major shareholders Bega Cheese Ltd. and Murray Goulburn Co-operative Co Ltd.

Saputo's bid valuing WCB at AUD8 per share has been unanimously recommended by the company's board, said Reuters. It has also been approved by Australia's Treasurer Joe Hockey, another report said.

Industry giants have recently taken stakes in Bega and WCB, batting to increase their influence in the Australian dairy industry. These included New Zealand's Fonterra Co-operative Group Ltd., the world's largest dairy exporter, and Japan's Kirin Holding Co Ltd, according to Reuters.