Photo source: Sidekick NZ
Dairy giant Fonterra has officially announced plans to sell its consumer business. The sale includes well-known brands such as Anchor, Mainland, Kāpiti, Anlene, Anmum, Fernleaf, Western Star, Perfect Italiano, and others, which produce a variety of products including butter, cheese, and infant formula.
“This work, coupled with the confidence we have in our revised strategic direction, has confirmed a divestment of our global consumer and associated businesses is in the best interests of the co-op,” chief executive Miles Hurrell said.
“We have been working with our team of advisors to assess potential divestment options, the assets and businesses in scope, and the best pathway to maximise value for our co-op.”
On top of the prominent brands mentioned, the sale would also include integrated businesses, such as Fonterra Sri Lanka, Fonterra Oceania, and 17 manufacturing facilities globally, with three of those located in New Zealand.
“We have received meaningful buyer interest in the businesses in scope for divestment, which is testament to their strength and potential,” Hurrell mentioned.
Hurrell also emphasised that the decision on which divestment strategy to pursue will hinge on various factors, particularly which option will maximise long-term value for the Co-op. The company is said to be currently considering either a direct sale to industry players, referred to as a trade sale, or an initial public offering (IPO).
Farmer shareholders will have a crucial role in the final decision, as they will vote on the selected divestment option, which is expected to help them yield a “significant” capital return.