The Fonterra Co-operative Group Ltd has today confirmed an agreement to sell its global consumer brand and associated businesses, Mainland Group, to French dairy giant Lactalis for $4.22 billion is now unconditional.
In August, Fonterra agreed to sell its major brands such as Mainland and Anchor for $3.845 billion.
The inclusion of Bega licenses held by Fonterra's Australian business brings the total proceeds for the sale of consumer and associated businesses to $4.22b.
Chairman Peter McBride earlier called the decision to divest the Mainland Group businesses significant and one the board did not take lightly.
“We have examined the strategic context we operate in, our strengths and how as a Co-op we create value for our farmer owners.
"The divestment will usher in an exciting new phase for the Co-op. We will be able to focus Fonterra’s energy and efforts on where we do our best work. We will have a simplified and more focused business, the value of which cannot be overstated."
The company described the sale as the "most dramatic major structural change" in the history of the business.
As part of the sale agreement, Fonterra would continue to supply milk and other products to the divested businesses, meaning New Zealand farmers' milk would still be found in dairy brands including Anchor and Mainland.
In February, Fonterra said it was targeting a tax-free capital return of $2 per share to shareholders and unit holders, equivalent to $3.2 billion, once the sale was complete.
At the time of the announcement, Fonterra chief executive Miles Hurrell said the sale allowed 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 [initial public offering]”.
SHARE ME