Fonterra Co-operative Group has entered into an agreement to sell its global Consumer and associated businesses to Lactalis for $NZ3.845 billion ($3.48 billion). The Auckland-based company announced on Friday that the deal could potentially increase by a further $NZ375 million. This addition would come from the inclusion of the Bega licenses held by Fonterra’s Australian business, boosting the transaction’s enterprise value to $NZ4.22 billion. Fonterra is a New Zealand multinational dairy co-operative owned by approximately 9,000 farmers. The company is the world’s largest producer of milk and a leading processor of dairy products.
The sale includes Fonterra’s global Consumer business, excluding operations in Greater China. It also encompasses Consumer brands, the integrated Foodservice and Ingredients businesses in Oceania and Sri Lanka, and the Foodservice business in the Middle East and Africa. This strategic move represents a significant shift in Fonterra’s business portfolio as it streamlines its operations.
Following the completion of the sale, Fonterra aims to provide a tax-free capital return of $NZ2 per share to its farmer shareholders. This return reflects the co-operative’s commitment to delivering value to its stakeholders. The sale proceeds will enable Fonterra to focus on its core strengths and strategic priorities in the global dairy market.
As part of the agreement with Lactalis, Fonterra will continue to supply milk and other products to the divested businesses. This arrangement ensures that milk from New Zealand farmers will still be used in well-known brands such as Anchor and Mainland, maintaining a connection to Fonterra’s heritage and supply chain.
