Fonterra completes $4.22b sale of consumer brands

Fonterra has completed the sale of its global consumer brand and associated businesses to French dairy giant Lactalis.

The $4.22 billion sale, which included Mainland and Anchor, was first agreed on in August last year.

It includes the dairy co-operative's global consumer business and consumer brands, excluding the consumer business in Greater China, where Fonterra will continue to own the Anchor brand.

Fonterra Chairman Peter McBride said that with the confirmation of the sale, the business could return capital to its owners and "focus on growing further through its core business as a New Zealand farmer-owned global B2B dairy provider”.

Outgoing chief executive Miles Hurrell said Fonterra could focus its resources, R&D spend, and farmers' capital to "grow these businesses, which generate the greatest return for farmers’ milk".

Hurrell also said the sale signalled the start of its long-term partnership with Lactalis.

"Lactalis becomes one of our most significant Ingredients customers, as we continue to supply milk and other products to the divested businesses.”

Fonterra has agreed to supply raw milk to Lactalis for a minimum term of 10 years, and ingredients and other products like bulk cheese for a minimum period of 6 years

Fonterra would return $3.2 billion of divestment proceeds to farmer shareholders and unit holders via a $2.00 per share capital return.

The record day for eligibility for the capital return is 5pm on April 9, with the payment date April 14.

NZX has approved a three-day administrative trading halt in respect of Fonterra's shares and Fonterra Shareholders’ Fund units listed on the NZX Main Board.

The halt will be in effect from market open on April 8 until close on April 10.

Over 88% of farmers voted in favour of the sale.

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