Fonterra outlines plan to sell key businesses
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The news: New Zealand dairy giant Fonterra is exploring the full or partial divestment of its global consumer business — its Fonterra Oceania business and the Fonterra Sri Lanka business.
The numbers: The two businesses collectively used about 15% of the co-operative's total milk solids and contributed 19% of Fonterra's group operating earnings in the first half of FY24. Fonterra said it will appoint advisors to assist with assessing divestment options with the actual divestment process expected to take 12 months to 18 months.
The context: Fonterra chair Peter McBride said the significant move followed a strategic review, and will set up the dual-listed Fonterra to grow long-term value for farmer shareholders and unit holders. It will focusing on being a B2B dairy nutrition provider and working closely with customers through its high-performing Ingredients and Foodservice channels.
Fonterra's global consumer business includes the Anchor, Mainland, Fernleaf, Western Star, Perfect Italiano and other brands. Fonterra Oceania, which was created through the merger of Fonterra Brands New Zealand and Fonterra Australia, includes consumer, foodservice and ingredients businesses, while Fonterra Sri Lanka also comprises consumer and foodservice businesses.
The decision has also prompted Fonterra’s veteran global markets CEO Judith Swales to leave the business at the end of July. She has been with the dairy giant since 2013.
What they said: "We have also received unsolicited interest in parts of these businesses, making now a good time to consider their ownership," CEO Miles Hurrell said
The sources: ASX announcement, ASX announcement
