Fonterra has completed the sale of its global consumer brand and associated businesses to French dairy giant Lactalis in a major strategic shift.
The $4.22 billion sale, which included well-known brands like Mainland and Anchor, was first agreed to in August last year; this marks an important step toward refocusing the co-operative on its core strengths.
The deal covers Fonterra’s global consumer business and brands, excluding its consumer operations in Greater China, where it will retain ownership of the Anchor brand, ensuring continued control in a key growth market.
Fonterra Chairman Peter McBride said confirmation of the sale allows the co-operative to return capital to its owners and sharpen its focus on what it does best—operating as a New Zealand farmer-owned global B2B dairy provider.
Outgoing chief executive Miles Hurrell reinforced that the move enables Fonterra to direct its resources, R&D spending, and farmers’ capital into higher-performing areas that deliver the strongest returns for farmers’ milk.
Hurrell also pointed to the long-term commercial upside of the deal, signalling the beginning of a strategic partnership with Lactalis.
“Lactalis becomes one of our most significant ingredient customers, as we continue to supply milk and other products to the divested businesses.”
As part of the deal, Fonterra has locked in supply agreements that provide certainty and stability, committing to supply raw milk to Lactalis for a minimum of 10 years, along with ingredients and products such as bulk cheese for at least 6 years.
In a clear win for its farmer-owners, Fonterra will return $3.2 billion of the proceeds directly to shareholders and unit holders through a $2.00 per share capital return.
The record date for eligibility is set for 5pm on April 9, with payments to be made on April 14.
NZX has approved a three-day administrative trading halt for Fonterra shares and Fonterra Shareholders’ Fund units on the NZX Main Board, running from market open on April 8 through to the close on April 10.