Global dairy giants Lactalis and Saputo are reportedly interested in acquiring the consumer-facing assets of Fonterra in New Zealand.
Japanese food company Meiji Holdings Co., which has dairy products within its wider portfolio, and US-headquartered investment firm Warburg Pincus are also ‘considering’ bidding for the assets, according to Reuters’ sources.
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The Fonterra dairy cooperative first announced an exit plan from its consumer- facing division in May last year, when it said the business would explore a full or partial disposal of the assets and would hire advisers to study options.
Then in November, Fonterra said it would move ahead with the proposal, throwing a possible IPO of the consumer operations into the option pool as the co-op instead plans to focus on the dairy ingredients and foodservice parts of the business.
The divestment plan also includes the co-op’s businesses in Oceania and Sri Lanka. CEO Miles Hurrell said in May last year that the disposal process was expected to take “at least” 12 to 18 months.
Two of the unnamed sources referenced by Reuters said the assets up for disposal could fetch around NZ$4bn ($2.3bn).
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By GlobalDataIn November, Fonterra said the assets “have received meaningful buyer interest” having noted in May that the consumer business used around 15% of the co-op’s milk solids and accounted for about 19% of group operating earnings in the first half of its 2024 fiscal year.
Interim first-half results issued in March last year, showed Fonterra’s group profit after tax rose 23% to NZ$674m, while EBIT was up 14% at NZ$986m.
In an update made in a statement on 17 April the co-op said: “Fonterra also continues to progress the trade sale process, including engaging with potential purchasers of the consumer and associated business.
“The co-op advises that it is now at the stage where some potential purchasers may pre-emptively seek regulatory approvals, which is a standard step ahead of any deal being agreed.”
The latest first-half results were issued for the Fonterra group as a whole in March for fiscal 2025 – operating profit of NZ$1.11bn and profit after tax of NZ$729m.
Just Food has asked Fonterra for an update on the disposal plans outside of New Zealand business hours and whether it was willing to comment on the Reuters’ report.
This publication has also approached Lactalis, although it is a public holiday in France today (1 May), for comment on the speculation, while Saputo and Warburg Pincus have been contacted as well. Just Food was unable to reach Meiji.
Warburg Pincus declined to comment.
Fonterra said in February the businesses up for divestment would be renamed the Mainland Group, with René Dedoncker appointed CEO and Paul Victor CFO.
The well-known Anchor butter brand is among the assets, along with Mammoth flavoured milk drinks and De Winkel yogurts. Others include Mainland, Kāpiti, Anlene, Anmum, Fernleaf, Western Star and Perfect Italiano.
