New Zealand dairy company Fonterra has confirmed it will sell its global consumer brands, known as Mainland Group, to the French dairy company Lactalis for $4.22 billion.
The agreement means famous brands such as Mainland and Anchor will change ownership.
Fonterra first agreed to sell the brands in August for $3.845 billion. The final amount increased after including special licences connected to Fonterra’s Australian business. This brought the total value of the deal to $4.22 billion.
Fonterra chairman Peter McBride said the decision was very important and not made lightly. The company’s board spent time thinking about how the co-operative could best support its farmer owners in the future.
He explained that selling the brands will allow Fonterra to focus more on the parts of the business it does best. The company believes this change will create a simpler and stronger business.
Fonterra described the sale as one of the biggest changes in its history. Even though the brands are being sold, New Zealand farmers will still supply milk for products such as Anchor and Mainland.
The milk will continue to come from farms across New Zealand. This means the dairy products may still contain New Zealand milk, even under new ownership.
Earlier this year, Fonterra also said it hopes to return about $2 per share to its shareholders once the sale is completed. This would give about $3.2 billion back to the co-operative’s owners.
Chief executive Miles Hurrell said the sale allows the company to return money to farmers faster than other options, such as selling shares on the stock market. He added that the move will help Fonterra focus on its future growth.
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