Fonterra Co-operative Group Limited has announced it will proceed with an ownership review of Fonterra Australia. The co-op is considering the most appropriate ownership structure with one option including an IPO, with the intention that the co-op retains a significant stake.
Fonterra’s Chief Executive Officer Miles Hurrell said that the Australian business is on strategy and remains important to the Co-op.
“By having access to ongoing external capital, we believe the Australian business will be best placed to deliver on its strategy and capture its full potential, at the same time as unlocking capital for the Co-op,” said Mr Hurrell.
“The strength of the Australian business has been demonstrated through recent results and execution of its strategic plan. Under the leadership of René Dedoncker, the Fonterra Australia management team has a clear strategy to maintain the business’s current momentum, supported by continued investment in product mix and growth.”
“Today’s announcement is an important milestone for our business which plays a significant role in the Australian dairy industry,” she said.
“It would be a great outcome if Australian investors, including our staff and the farmers who supply us with their milk, could have the opportunity to participate in the ownership of our business with its iconic Australian brands such as Western Star, Perfect Italiano and Bega.
“As we explore our options we will be mindful that our customer and farmer relationships are core to our business. These key stakeholders can be confident there will be no change in how we engage with them through this period, while an outcome that results in improved access to external capital will enable Fonterra Australia to continue advancing the Australian dairy industry.”
Fonterra Australia Suppliers’ Council Chairman Alan Davenport said he hoped that ownership options could present opportunities to further align supplier interests.
“Farmers are already proud to supply milk for a fantastic stable of local brands, and I am pleased that one of the options under consideration is an IPO of Fonterra Australia. I look forward to working with René and the team to ensure any change to the ownership structure builds on the partnership between Fonterra Australia and its farmer suppliers,” said Mr Davenport.
Fonterra has been a proud participant in the Australian dairy industry for two decades. Over this time Fonterra Australia has invested in market-leading Consumer and Foodservice businesses complemented by a strong Ingredients business.
