A source told Reuters on Monday that Bega was conducting due diligence on Kirin's Lion Dairy & Drinks, which would likely cost around A$550 million ($402 million), although there was no guarantee of a deal.

Kirin was forced in August to scrap an earlier attempt to sell the business to Chinese food conglomerate China Mengniu Dairy Co Ltd for A$600 million after the Australian government blocked the sale amid broader geopolitical tension.

(Reporting by Ritsuko Ando; Editing by Chang-Ran Kim)