The co-op had explored a dual-track approach—either divesting these units or pursuing an IPO—but opted for the sale to deliver faster and cleaner capital returns. The deal could increase by NZ$375 million if Bega licenses tied to its Australian business are included, potentially bringing the total enterprise value up to NZ$4.22 billion.

Fonterra aims to return approximately NZ$2 per share—equating to around NZ$3.2 billion in tax-free capital—to its farmer shareholders after transaction closure. The deal includes long-term supply agreements ensuring Fonterra continues supplying milk and ingredients to the divested brands. Regulatory and shareholder approval processes are underway, with completion expected in the first half of 2026.

Australia’s competition authority (ACCC) has signaled it will not oppose the acquisition, noting that Fonterra and Lactalis offer different product portfolios and sourcing strategies, reducing the likelihood of market overlap. This approval removes a major barrier and suggests relatively smooth regulatory passage.