According to Fonterra, selling these consumer brands aligns better with the company’s core mission to serve its farmer shareholders and unitholders by concentrating on milk production, milk and protein powders, and direct business-to-business dairy products. “Fonterra is not the highest-value owner of the consumer and associated businesses in the longer term. A divestment would allow a new owner with the appropriate expertise and resources to fully unlock their potential,” said Fonterra CEO Miles Hurrell. The company has also noted receiving unsolicited interest in these divisions, suggesting it is an opportune moment to reevaluate their ownership.

Among potential suitors, the ASX-listed Bega Group, which sold naming rights to Fonterra in 2001 in a deal set to expire in less than two years, is seen as a likely candidate. Fonterra had previously held a stake in Bega Group. The Perich Group is another mentioned potential bidder, though currently focused on reviving Noumi, formerly known as Freedom Foods.

With substantial capital in the market—Macquarie Group reported a global reserve of approximately $US2.59 trillion at the end of last year—private equity firms are expected to closely scrutinize Fonterra’s offer. The businesses for sale, although challenging to value due to commodity-level margins typical of cheese products, contributed significantly to Fonterra’s earnings, with the consumer business generating $781 million in gross profit from $3.3 billion in revenue last year.