Co-op will appeal after Australian court declines to rule on matter that could affect any Mainland deal.
Fonterra is to appeal a court decision that dismissed its case against Australian dairy company Bega Cheese regarding trademark licensing agreements.
The Supreme Court of New South Wales dismissed the case, saying it did not have jurisdiction to make a declaration on a deal that did not exist.
In a statement, Fonterra managing director M&A and strategic divestments Mike Cronin said:
“Our view has not changed as a result of the court decision and Fonterra intends to appeal this decision in the coming weeks.
Fonterra has a longstanding agreement to make cheese in Australia under the Bega brand, and wanted a ruling that its divestment plans would not affect the existing trademark deal and trigger clauses that would allow Bega to end the deal.
“Until a particular restructure and a particular sale process are identified, it is not apparent that the specific declarations sought would be of any utility,” Justice Elisabeth Peden said in her judgement.
She said Fonterra had “no scheduled sale, nor restructure agreed by a purchaser”.
Fonterra said the decision did not alter its plan to sell the consumer businesses, which it has said could be sold as one entity called Mainland, or various individual operations.
In court proceedings, Fonterra’s lawyers were reported to have told the court that a negative decision on the trademark use could kill the divestment plan or materially affect the sale price.
Bega Cheese so far has not taken part in due diligence study of the businesses up for sale.
“We hope to work constructively with Fonterra Group on the sale of its Oceania businesses of which Bega Group is a natural acquirer and remains very interested in,” said Barry Irvin, executive chair of Bega Group.
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