SanCor refused to be drawn on whether it is in talks with Fonterra

SanCor refused to be drawn on whether it is in talks with Fonterra

New Zealand dairy giant Fonterra is in talks to acquire assets from SanCor, according to a senior government official in the Argentine dairy firm's home state.

Amid a long-standing financial crisis that led to a restructuring of SanCor and the Argentine government to agree to issue a loan of ARS450m (US$25.8m) to the dairy cooperative, the rumors of a potential sale are getting stronger.

Luis Contigiani, production minister for Argentina's Santa Fe province - where SanCor's main operations are located - said in a statement to the media the central government has yet to send the funds to the cooperative.

Contigiani also claimed SanCor executives had revealed to him there would an agreement with Fonterra would be finalised in 15 to 20 days' time.

Sources at SanCor told just-food they could not comment on whether the firm is in talks with any interested party. The sources also dismissed the possibility of any deal being sealed in the timeframe suggested by Contigiani since this type of agreement must be approved by an extraordinary assembly of the co-op - and 30 days notice must be given for such a meeting.

The restructuring of the co-op, agreed unanimously in an extraordinary assembly in May, already put forward the possibility of a strategic partnership.

It would not be the first time SanCor and Fonterra worked together: they had a distribution agreement in 2004.

Sources at Fonterra contacted by just-food declined to comment.