Australian dairy group Bonlac Foods is to hold supplier meetings next month to discuss the recent in-principle agreement reached with Fonterra regarding a merger.

“The purpose of these meetings is to give the supplier shareholders an update on the negotiations with Fonterra regarding a possible restructure of Bonlac Foods,” the company was quoted as saying by the Australian Associated Press.

“Bonlac has reached a non-binding in-principle agreement with Fonterra which is now the subject of detailed negotiation between the parties.”

Bonlac is 25% owned by New Zealand dairy giant Fonterra and 75% owned by dairy farmer suppliers in Victoria and Tasmania.