Saputo Inc is nearing control of Australia's Warrnambool Cheese & Butter Factory Co as Bega Cheese Ltd said it would be selling its stake to the largest milk processor in Canada, Bloomberg reported. Bega Cheese is the second largest stakeholder of the Australian dairy producer.

In a statement, Bega Cheese said it will be divesting the 18.8% stake it holds in Warrnambool to Saputo's A$537 million or $473 million offer. Bloomberg data showed that the sale will increase Saputo's holding to 45.2%. Last month, Bega Cheese decided not to continue with its own bid for the Sungold milk and Great Ocean Road cheese manufacturer, the report said.

Since Bega's offer given in September which has started a three-way race for control of the firm with Murray Goulburn Cooperative Co, the market value of Warrnambool has increased more than two times. The suitors are looking to ramp up production and add to their export infrastructure to help capitalize on the increasing dairy demand in Asia, the report said.

In the statement, Bega Chairman Barry Irvin said, "While our bid was not successful our focus remains the same. The significant profit realized by the sale of our WCB holding will add to our capacity to pursue a number of strategic business opportunities."

The statement added that Bega will be making a profit before tax and costs of anywhere from A$61.8 million to A$68.2 million. The final figure will depend on the overall holding that Saputo will secure.

In a statement issued on December 17, Saputo said it will be paying no more than A$9.60 cash a share if it would be gaining over 90% of the Australian company. The offer of the Montreal-based firm exceeds that of Murray Goulburn's A$9.50 a share. The Australian Competition Tribunal still needs to approve Murray Goulburn's bid, the report said.