Fonterra Co-operative Group Ltd has completed the sale of its global consumer and associated businesses, Mainland Group, to Lactalis.
Chairman Peter McBride said the sale marks a milestone for the co-operative.
“With the divestment complete, Fonterra can return capital to its owners and focus on growing further through its core business as a New Zealand farmer-owned global B2B dairy provider,” said McBride.
Chief executive officer Miles Hurrell said the company will focus on its ingredients and foodservice businesses.
“Through our high performing Ingredients and Foodservice businesses, we sell innovative dairy products to customers globally under our NZMP and Anchor Food Professionals brands,” said Hurrell.
“We can now focus our resources, R&D spend, and farmers’ capital on continuing to grow these businesses, which generate the greatest return for farmers’ milk.
“The completion of the sale also signals the start of our 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 will return $3.2 billion from the sale to farmer shareholders and unit holders through a $2.00 per share capital return.
The sale includes:
- Fonterra’s global consumer business and brands, excluding the consumer business in Greater China, where Fonterra retains the Anchor brand.
- The integrated foodservice and ingredients business in Oceania.
- The integrated foodservice business in Sri Lanka.
- The Middle East and Africa foodservice business.
Supply agreements between Fonterra and Lactalis include Raw Milk Supply Agreement, with a minimum term of 10 years and automatic renewal until terminated. It also includes Global Supply Agreement, covering ingredients and other products such as bulk cheese, with a minimum term of 6 years and automatic renewal until terminated.