Murray Goulburn (MG), Australia's largest dairy food company, on Wednesday announced an increased takeover offer for rival company Warrnambool Cheese and Butter (WCB).

Murray Goulburn's revised offer is 9.00 AU dollars (8.97 U.S. dollars) for each Warrnambool share, up from its original offer of 7.50 AU dollars a share.

The announcement came a day after Treasurer Joe Hockey gave approval to Canadian bidder Saputo with an offer of 8.00 AU dollars a share for Warranmbool.

Murray Goulburn on Wednesday said its increased offer underscored its commitment to acquiring the Victorian dairy producer.

"The combination of MG and WCB is the only option available that delivers an Australian-owned and operated company with the scale, capacity, strength and momentum to service global growth opportunities, returning profits to dairy farmers and their communities," Murray Goulburn said in a statement.

Bega Cheese, a third bidder, is offering cash and a share swap.

The value of Bega's offer is 7.52 AU dollars a share at current prices.