Following a scoping phase, Fonterra Co-operative Group (ASX:FSF), a global dairy giant headquartered in New Zealand, has decided to proceed with a sale process to divest its global consumer businesses, including Fonterra Oceania and Fonterra Sri Lanka.
The initiative was first announced in May 2024. The objective is to streamline operations and concentrate on the company’s core Ingredients and Foodservice divisions.
The divestment plan encompasses well-known brands such as Anchor, Mainland, Kpiti, Anlene, Anmum, Fernleaf, Western Star, and Perfect Italiano. These brands collectively accounted for approximately 15% of Fonterra’s total milk solids and contributed about 19% to the group’s operating earnings in the first half of FY24.
Fonterra has received significant interest from potential buyers. The company is evaluating both trade sales and initial public offering (IPO) options to determine the most beneficial divestment pathway. A final decision will be based on factors such as long-term value creation for the co-operative.
The divestment process is expected to take at least 12 to 18 months and will require shareholder approval. Fonterra plans to provide updates as the process progresses and aims to return significant capital to farmer shareholders and unit holders following the divestment.