Fonterra has agreed to sell its global Consumer and associated businesses to French dairy company Lactalis for NZ$3.845 billion ($3.48 billion).
The sale includes Fonterra’s global consumer business (excluding Greater China) and consumer brands such as Mainland, Anchor, Perfect Italiano, and Anmum. It also comprises the integrated foodservice and ingredients businesses in Oceania and Sri Lanka and the Middle East and Africa foodservice business.
The transaction may also include the licence for Bega Cheese-branded products held by Fonterra’s Australian business, which will then add a further NZ$375 million to the price. This will be confirmed once a dispute with Bega Cheese Limited is resolved.
Following the deal, Fonterra will continue to supply milk and other products to the divested businesses under long-term agreements. This means New Zealand farmers’ milk will still be found in dairy brands including Anchor and Mainland.
“Following a highly competitive sale process with multiple interested bidders, the Fonterra Board is confident a sale to Lactalis is the highest value option for the co-op, including over the long-term,” said Fonterra chairman Peter McBride.
“Alongside a strong valuation for the businesses being divested, the sale allows for a full divestment of the assets by Fonterra, and a faster return of capital to the co-op’s owners, when compared with an IPO.”
Previous bidders for the businesses include Japan’s Meiji and the consortium consisting of ASX-listed Bega Group and Dutch dairy cooperative FrieslandCampina.
Lactalis, which owns brands such as Pauls, Vaalia, Oak and President, already secured clearance from the Australian Consumer and Competition Commission (ACCC) for the deal last month.
Lactalis CEO Emmanuel Besnier said the acquisition will enable the company to strengthen its strategy across Oceania, Southeast Asia and the Middle East.
The sale, subject to the satisfaction of all conditions, is expected to complete in the first half of next year. Fonterra will seek farmer shareholder approval by ordinary resolution at a special meeting in late October or early November.
The co-op’s FY25 earnings guidance remains unchanged.
