The Supreme Court of New South Wales has dismissed Fonterra Co-operative Group’s case regarding trademark licensing agreements with Bega Group and its plans to divest its consumer division (recently amalgamated into Mainland Group for divestment or an IPO).
Fonterra wanted certainty its divestment plan would not affect existing trademark licence agreements with Bega, or trigger “change of control” clauses in the agreements.
Fonterra has licensed the Bega Cheese brand since 2001, and its products account for six per cent of total Mainland Group revenue. Fonterra also owns brands Mainland, Perfect Italiano, and Western Star butter.
Fonterra’s concern is that if there is a risk the buyer cannot use the trademarks, the likely price of the sale would be jeopardised.
Bega Group countered, saying that while the exact nature of the restructure was unknown there was no concrete factual basis for the court to make a ruling.
Meanwhile, Fonterra is still trying to divest the business and Bega Group executive chair, Barry Irwin, says the group is “a natural acquirer and remains very interested”.
But while the case was underway, it refused to sign non-disclosure agreements to access confidential documents.
Mainland Group – valued at as much as $4 billion – is not without other suitors. French company Lactalis, Dutch multinational FrieslandCampina, and the US private equity firm, Warburg Pincus are all in the arena.
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