Fonterra sells stake in DairiConcepts JV
Fonterra has sold its stake in DairiConcept to DFA
Fonterra has announced plans to sell its 50% stake in its US joint venture with Dairy Farmers of America.
DFA will purchase Fonterra's stake in DairiConcepts for NZ$196m (US$127.9m).
The DairiConcepts partnership was established in 2000 when Fonterra contributed its US dairy/cheese flavours business and DFA contributed a number of cheese and cheese-powder assets.
Fonterra CEO Theo Spierings said Fonterra had decided to exit the partnership as it was considered to be a "non-core component of its strategy". He added the transaction did not impact the longstanding relationship with DFA.
"We still value our relationship with DFA, however, as the DairiConcepts business is almost completely stand-alone operationally, we have agreed that it would be simpler for one of the partners to buy the other out.
"The US remains a key part of our global multi-hub strategy and this divestment does not prevent Fonterra from exploring new growth opportunities for this milk pool.
"A long-term supply agreement we have reached as part of the sale, means our US milk pool will continue to meet value add customer demand through our NZMP brand."
The sale is expected to take place by the end of 2015.
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