After a scoping phase, Fonterra Co-operative Group (ASX:FSF)a global dairy giant headquartered in New Zealand, has decided to proceed with a sale process to divest its global consumer businesses, including Fonterra Oceania and Fonterra Sri Lanka.
The initiative was first announced in May 2024. The goal is to streamline operations and focus on the company’s core Ingredients and Food Service divisions.
The divestment plan includes well-known brands such as Anchor, Continent, Kpiti, Anlene, Anmum, Fernleaf, Western Star and Perfect Italiano. These brands collectively accounted for approximately 15% of Fonterra’s total milk solids and contributed approximately 19% of the group’s operating profits in the first half of fiscal 2024.
Fonterra has received significant interest from potential buyers. The company is evaluating both trade sale and initial public offering (IPO) options to determine the most advantageous divestment path. The final decision will be based on factors such as long-term value creation for the cooperative.
The divestment process is expected to take at least 12-18 months and require shareholder approval. Fonterra expects to provide updates as the process progresses and aims to return significant capital to farmer shareholders and unit holders following the disposal.