Global dairy leaders Lactalis and Saputo are exploring opportunities to acquire the consumer-focused assets of Fonterra in New Zealand.
Additionally, Japanese company Meiji Holdings Co., which operates within the dairy sector, along with US-based investment firm Warburg Pincus, are contemplating bids for these assets, according to sources from Reuters.
Fonterra, the prominent dairy cooperative, initially announced its exit strategy from the consumer division in May of last year. The cooperative signaled intentions to explore both full and partial asset disposals and engaged advisors to assess options.
In November, Fonterra confirmed its plans to proceed with the proposal, including the possibility of an IPO for the consumer operations as it refocuses on its dairy ingredients and foodservice sectors.
This divestment strategy also encompasses Fonterra’s operations in Oceania and Sri Lanka. CEO Miles Hurrell indicated in May that the disposal process is anticipated to last “at least” 12 to 18 months.
In November, Fonterra noted that the assets “have received meaningful buyer interest,” pointing out that the consumer segment utilized around 15% of the cooperative’s milk solids and represented about 19% of the group’s operating earnings for the first half of the 2024 fiscal year.
Interim first-half results released in March last year revealed a 23% increase in Fonterra’s group profit after tax, reaching NZ$674m, while EBIT rose 14% to NZ$986m.
In a statement dated April 17, Fonterra announced: “The co-op continues to advance the trade sale process, engaging with potential purchasers of the consumer and related businesses.
“The co-op advises that it is now at a juncture where some potential purchasers may proactively seek regulatory approvals, a standard procedure before any agreement is finalized.”
The most recent first-half results for the Fonterra group, shared in March for fiscal 2025, reported an operating profit of NZ$1.11bn and a post-tax profit of NZ$729m.
This publication has also contacted Lactalis for commentary, although it is a public holiday in France today (1 May). Meanwhile, Saputo and Warburg Pincus have also been approached. Unfortunately, Just Food could not reach Meiji.
Warburg Pincus has opted not to comment.
In February, Fonterra stated that the businesses slated for divestment would be renamed the Mainland Group, appointing René Dedoncker as CEO and Paul Victor as CFO.
Among the assets are the well-known Anchor butter brand, Mammoth flavored milk drinks, and De Winkel yogurts. Other notable brands include Mainland, Kāpiti, Anlene, Anmum, Fernleaf, Western Star, and Perfect Italiano.
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