SYDNEY: Fonterra Co-operative Group Ltd has announced its decision to proceed with the sale of its global Consumer business, along with its integrated businesses in Fonterra Oceania and Fonterra Sri Lanka. The decision follows a detailed scoping phase.
CEO Miles Hurrell stated that since their announcement in May 2024, Fonterra has been working with advisors to explore potential divestment options and evaluate the best pathways to maximize value for the co-op. The company has concluded that selling these businesses aligns with their revised strategic direction, which focuses on prioritizing their Ingredients and Foodservice segments.
Hurrell noted that there has been significant buyer interest, reflecting the strength and potential of the businesses up for sale. During the scoping phase, Fonterra considered both a trade sale and an IPO as viable options and will now prepare for a sale process pursuing both avenues. Advisors have been selected to assist with this process.
Fonterra plans to test the market to determine the best terms and value of both a trade sale and an IPO before seeking approval from farmer shareholders through a vote. The final decision on the divestment pathway will depend on several factors, including which option provides the most long-term value for the co-op.
Fonterra will provide updates in the coming months as the sale process progresses and continues to target a significant capital return to its farmer shareholders and unit holders following the divestment.