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  • Final Countdown for Fonterra’s Multi-Billion Dollar Mainland Sale to Lactalis: Unconditional Deal Set for Imminent Closure

    Final Countdown for Fonterra’s Multi-Billion Dollar Mainland Sale to Lactalis: Unconditional Deal Set for Imminent Closure

    Fonterra, the New Zealand-based co-operative, has announced that it is on the cusp of finalising the sale of its Mainland consumer business. As of now, the deal has met all the necessary conditions and is set to conclude within the current month.

    Regulatory Approvals Secured

    Fonterra has assured that all mandatory regulatory approvals have been obtained, paving the way for the successful separation of the business. The company initially disclosed plans to sell its global consumer and associated businesses, collectively known as the Mainland Group, to French dairy giant Lactalis in August of last year.

    The Mainland Group encompasses a range of popular brands, including Mainland, Anchor, Perfect Italiano, and Anmum.

    Price Adjustment

    Originally, the deal was valued at NZ$3.845 billion, but an agreement with the Bega Group to incorporate the Bega licences into the divestment process led to an increase in the price to $4.22 billion.

    The proposal met with approval from Fonterra’s farmer shareholders, who voted in favor of the transaction last October.

    Transaction Conclusion

    “With all terms of the sale fulfilled, Fonterra and Lactalis are set to finalise the transaction,” stated Fonterra. It anticipates the completion of the transaction by the end of the current month, with the record date for the capital return expected on April 9 and the payment date slated for April 14.

    Questions & Answers

    What is the Mainland Group?
    The Mainland Group refers to Fonterra’s global consumer and associated businesses. It includes brands such as Mainland, Anchor, Perfect Italiano, and Anmum.

    What led to the increase in the deal price from NZ$3.845 billion to $4.22 billion?
    The price of the deal was increased following an agreement with the Bega Group to include the Bega licences in the divestment, leading to a rise in the overall value of the transaction.

    When is the transaction expected to be finalised?
    Fonterra anticipates the completion of the transaction by the end of the current month. The record date for the capital return is expected to be April 9, followed by the payment date on April 14.

  • Lactalis Australia Enriches Pauls Dairy Line with Double Espresso Caramel and Summer Berries Flavours

    Lactalis Australia Enriches Pauls Dairy Line with Double Espresso Caramel and Summer Berries Flavours

    Lactalis Australia has recently introduced two novel tastes to their high-protein dairy line, Pauls. The fresh offerings, Double Espresso Caramel and Summer Berries, add an exciting twist for consumers.

    The introduction of Double Espresso Caramel and Summer Berries is a thrilling addition to Pauls’ high-protein dairy line. Sold in convenient 400ml bottles, each serving delivers an impressive 30g of protein. These new flavors not only promise a burst of taste but also health benefits, as the company maintains that Paul’s flavored milk range is low in fat and contains no added sugar.

    A spokesperson for Lactalis Australia expressed the company’s enthusiasm for the launch, acknowledging that the new flavors build upon the successful range, providing even more variety for Australians in search of tasty, functional dairy products.

    The representative reaffirmed the company’s commitment to innovation and growth, stating, “Here at Lactalis Australia, we’re proud to continue diversifying our product portfolio to respond to the shifting needs and preferences of our consumers.”

    Questions & Answers

    What new flavors has Lactalis Australia added to their high-protein dairy range, Pauls?
    Pauls has introduced two new flavors to their high-protein dairy line: Double Espresso Caramel and Summer Berries.

    What are the health benefits of Pauls’ flavored milk range?
    Each serving of Pauls’ flavored milk contains 30g of protein. The range is also low in fat and free from added sugars.

    What is Lactalis Australia’s commitment in terms of their product range?
    Lactalis Australia is committed to continually innovating and expanding their product portfolio to meet the evolving needs and preferences of their consumers.

  • Fonterra Farmer Shareholders Green-Light $4.22 Billion Consumer Division Sale to Lactalis

    Fonterra Farmer Shareholders Green-Light $4.22 Billion Consumer Division Sale to Lactalis

    Fonterra’s farmer shareholders have granted approval for the company’s proposal to divest its consumer products division. The Mainland Group and its associated businesses are set to be sold to Lactalis for a sum of $4.22 billion.

    High Support for Divestment

    A resounding 88.47% of farmer shareholders voted in support of this divestment decision in a special virtual meeting. The company asserts that this level of shareholder support exemplifies one of the core principles that sets Fonterra apart from other processors in the market.

    Fonterra Chairman Peter McBride voiced his appreciation for the active participation of the farmer shareholders throughout the decision-making process. Since the exploration of divestment options was initiated in May of the previous year, and especially over the past few weeks when the full details were made available, there has been a significant uptick in discussion and engagement from the farmers.

    McBride commented on the strategic implications of the divestment, stating, “We have thoroughly examined our strategic context, our strengths, and the way we create value for our farmer owners as a cooperative. This divestment will result in a more simplified and focused business, the value of which cannot be overstated.”

    To approve the sale, Fonterra required more than half of the total votes, a condition that was met with ease due to the high percentage of votes supporting the divestment.

    Final Steps and Future Investments

    The divestment process of Mainland Group’s business from Fonterra is now pending regulatory approvals. These approvals are currently underway, and the completion of the transaction is expected to occur in the first half of the coming year.

    In addition, Fonterra has revealed plans to make a significant investment in its dairy operations. The company intends to allot NZ$75 million ($66 million) towards expanding butter production at its Clandeboye site located in South Canterbury.

    Questions & Answers

    What percentage of Fonterra’s farmer shareholders voted in favour of the divestment?
    Approximately 88.47% of Fonterra’s farmer shareholders voted in favour of the divestment.

    What will the divestment result in for Fonterra?
    The divestment will lead to a more simplified and focused business for Fonterra.

    What significant investment has Fonterra planned following the divestment?
    Fonterra has planned to invest NZ$75 million ($66 million) in expanding butter production at its Clandeboye site in South Canterbury.

  • Fonterra Sells Global Consumer Business To Lactalis In $3.48 Billion Deal

    Fonterra Sells Global Consumer Business To Lactalis In $3.48 Billion Deal

    Fonterra, a leading dairy company, has announced it is selling its global Consumer and associated businesses to French dairy enterprise, Lactalis. The transaction is valued at NZ$3.845 billion ($3.48 billion).

    Details of the Sale

    The sale incorporates Fonterra’s global consumer business (excluding Greater China) and a range of consumer brands such as Mainland, Anchor, Perfect Italiano, and Anmum. Also included are the integrated foodservice and ingredient operations in Oceania, Sri Lanka, the Middle East and Africa.

    Another element of the transaction that could potentially increase the total sale price by another NZ$375 million is the license for Bega Cheese-branded products. Currently held by Fonterra’s Australian business, the inclusion of this license in the sale depends on the resolution of a dispute with Bega Cheese Limited.

    Despite this sale, Fonterra plans to continue providing the divested businesses with milk and other products via long-term agreements. This ensures that dairy brands like Anchor and Mainland will continue to incorporate New Zealand farmers’ milk in their products.

    Justification for the Sale

    Fonterra chairman Peter McBride affirmed the board’s confidence in the transaction, stating that after an extremely competitive sale process involving multiple bidders, they believe the sale to Lactalis offers the highest value option for the cooperative. This decision was influenced not only by the strong valuation of the businesses being sold, but also by the opportunity for a full divestment of the assets and a quicker return of capital to the co-op’s owners, compared to an Initial Public Offering (IPO).

    Several bidders, including Japan’s Meiji and a consortium of the ASX-listed Bega Group and Dutch dairy cooperative FrieslandCampina, had previously shown interest in the businesses.

    Lactalis, an owner of popular brands such as Pauls, Vaalia, Oak and President, received clearance from the Australian Consumer and Competition Commission (ACCC) for the deal last month. Lactalis CEO Emmanuel Besnier expressed that this acquisition will strengthen the company’s strategy across Oceania, Southeast Asia, and the Middle East.

    Finalizing the Sale

    The sale is anticipated to be finalized in the first half of next year, subject to the satisfaction of all conditions. Fonterra will hold a special meeting in late October or early November to seek farmer shareholder approval for the deal.

    Fonterra’s earnings guidance for FY25 remains unchanged, despite the sale.

    Questions & Answers

    What businesses are included in the sale?
    The sale includes Fonterra’s global consumer business (excluding Greater China), several consumer brands and integrated foodservice and ingredient operations in Oceania, Sri Lanka, the Middle East and Africa.

    Will Fonterra continue to supply milk to the divested businesses?
    Yes, Fonterra plans to continue providing the divested businesses with milk and other products via long-term agreements.

    When is the sale expected to be finalized?
    The sale is expected to be completed in the first half of next year, subject to the satisfaction of all conditions.

  • Fonterra Settles Dispute With Bega Group, Proceeds With Nz$4.22 Billion Divestment To Lactalis

    Fonterra Settles Dispute With Bega Group, Proceeds With Nz$4.22 Billion Divestment To Lactalis

    Fonterra has successfully settled its disagreement with the Bega Group over Bega licenses in Australia. This settlement followed Fonterra’s decision to divest its consumer business to Lactalis, a French dairy conglomerate.

    Fonterra’s Divestment to Lactalis

    Just last week, Fonterra, headquartered in New Zealand, decided to offload its consumer and related businesses to Lactalis in a deal worth NZ$3.845 billion ($3.46 billion). These businesses house popular brands like Mainland, Anchor, and Perfect Italiano, and they currently hold the licenses for Bega Cheese-branded products within Australia.

    Fonterra had originally planned to include the Bega licenses in its divestment. However, this necessitated the resolution of an ongoing legal dispute with the Bega Group.

    Resolution of Bega-Fonterra Dispute

    In a recent development, both parties reached a consensus that the deal would not have any impact on the terms of their license agreements. They also agreed to put an end to the legal proceedings.

    Fonterra clarified in a statement that the “sale to Lactalis of Fonterra’s global consumer and related businesses does not constitute a change of control under the Bega licenses.”

    Bega reciprocated in its own statement, “Fonterra intends to structure the sale to Lactalis in a way which will not affect the operation of the Trade Mark License Agreements or trigger the change of control clauses within those agreements.”

    Bega Group also asserted its anticipation for collaboration with Fonterra and Lactalis during the transition period and beyond. It confirmed that the sale to Lactalis would not modify the current contractual arrangements linked with the Bega brand or the benefits the Bega Group gains from such arrangements.

    As a consequence of the resolution, the Bega licenses held by Fonterra’s Australian business will be incorporated into the divestment.

    Financial Details of the Deal

    As previously declared, Lactalis will provide Fonterra an extra NZ$375 million for the licenses on top of the NZ$3.845 billion base enterprise value. This pushes the total proceeds from the sale to NZ$4.22 billion.

    In earlier developments, Bega had presented a bid for Fonterra’s consumer business as part of a consortium with Dutch dairy cooperative FrieslandCampina. Japan’s Meiji was also a contender in the auction.

    Questions & Answers

    What was the dispute between Fonterra and Bega about?
    The dispute was regarding Bega licenses in Australia that Fonterra intended to include in its divestment to Lactalis.

    What resolution was reached between Fonterra and Bega?
    Both companies agreed that the sale of Fonterra’s businesses to Lactalis would not affect their existing license agreements.

    What is the financial value of the Fonterra-Lactalis deal?
    Lactalis will pay Fonterra a total of NZ$4.22 billion, which includes the base enterprise value of NZ$3.845 billion and an additional NZ$375 million for the Bega licenses.