Fonterra Sells Consumer Business to Lactalis for NZ$38.45 Billion

Fonterra Co-operative Group, a prominent dairy cooperative based in New Zealand, has agreed to sell its consumer products and related businesses to Lactalis, a leading French dairy company. The transaction is valued at 38.45 billion New Zealand dollars, equivalent to 22.3 billion US dollars. This strategic move by Fonterra aims to streamline its operations and focus on its core dairy production and export businesses.

The sale includes Fonterra's global consumer products business, excluding the Greater China region, along with its consumer brands and comprehensive foodservice and ingredients businesses in Oceania and Sri Lanka. Additionally, the deal encompasses Fonterra's foodservice operations in the Middle East and Africa. This extensive portfolio transfer underscores Lactalis' ambition to expand its global footprint and diversify its product offerings.

The decision to divest these assets aligns with Fonterra's long-term strategy to enhance its financial performance and operational efficiency. By concentrating on its core competencies, Fonterra aims to better serve its farmer-owners and maintain its position as a leading global dairy exporter. The sale to Lactalis is expected to provide Fonterra with the necessary capital to invest in innovation and sustainability initiatives, further strengthening its competitive edge in the global dairy market.

Lactalis, known for its strong presence in the European and North American markets, will benefit from this acquisition by gaining access to Fonterra's established consumer brands and extensive distribution networks. The integration of Fonterra's consumer products business will enable Lactalis to leverage its existing infrastructure and expertise to drive growth in new regions, particularly in Asia and the Middle East.

The transaction is subject to regulatory approvals and other customary closing conditions. Once completed, the sale will mark a significant milestone for both companies, as they navigate the evolving landscape of the global dairy industry. Fonterra's focus on its core dairy production and export businesses, coupled with Lactalis' expanded consumer product portfolio, is poised to create a more dynamic and competitive market environment.