Fonterra has resolved its dispute with Bega Group regarding the Bega licences in Australia, following the decision to sell its consumer business to Lactalis.
Last week, New Zealand-based Fonterra agreed to sell its consumer and associated businesses to French dairy giant Lactalis for NZ$3.845 billion ($3.46 billion). The businesses own brands such as Mainland, Anchor and Perfect Italiano and hold the licences for Bega Cheese-branded products in Australia.
Fonterra intended to include the Bega licences in the divestment, but this required its legal dispute with Bega Group to be resolved.
In the latest update, the two companies agreed that the deal would not affect the terms of their licence agreements and that the legal proceedings would be discontinued.
“Bega agrees that the structure of the sale to Lactalis of Fonterra’s global consumer and associated businesses does not constitute a change of control under the Bega licences,” Fonterra said in a statement.
“Fonterra intends to structure the sale to Lactalis in a manner which will not affect the operation of the Trade Mark Licence Agreements or trigger the change of control clauses within those agreements,” Bega said in its separate release.
“Bega Group looks forward to working with Fonterra and Lactalis through the transition and into the future. The sale to Lactalis does not alter the current contractual arrangements associated with the Bega brand or the benefits that Bega Group obtains from those arrangements,” it added.
As a result, the Bega licences held by Fonterra’s Australian business will be included in the divestment.
As previously announced, Lactalis will pay Fonterra NZ$375 million for the licences in addition to the NZ$3.845 billion base enterprise value, bringing the total proceeds for the sale to NZ$4.22 billion.
Bega previously placed its bid for Fonterra’s consumer business via a consortium with Dutch dairy cooperative FrieslandCampina. Japan’s Meiji also participated in the auction.
