New Zealand’s Fonterra, one of the world’s leading dairy co-ops, has confirmed it will sell its consumer business, including brands Anchor and Mainland.
The co-op is also looking to dispose of its integrated businesses Fonterra Oceania and Fonterra Sri Lanka.
“Since our announcement in May 2024, 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,” said CEO Miles Hurrell.
“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.
“Our revised strategy will see us prioritise our Ingredients and Foodservice businesses, creating a more focused and higher performing co-op. ”
He added: “We have received meaningful buyer interest in the businesses in scope for divestment, which is testament to their strength and potential.
Related: Fonterra dairy co-op reports NZ$1.16bn profit for 2024
“Through the scoping phase, we have assessed both a trade sale and IPO as attractive divestment options and will now prepare for a sale process which will pursue both options.”
Fonterra has selected advisors to assist in managing the process, added Hurrell.
“We will thoroughly test the terms and value of both a trade sale and IPO with the market before seeking support from farmer shareholders for a divestment option through a vote,” he said. “A final decision on which divestment pathway to pursue will be based on several factors, including which option will result in optimal long-term value for the co-op.”
Fonterra says it will provide updates over the coming months as this programme of work progresses and continues to target a significant capital return to be made to farmer shareholders and unit holders following the divestment.
The co-op, which has just raised the midpoint of the 2024/25 season forecast Farmgate Milk Price from $9.00 per kgMS to $9.50 per kgMS, has also announced changes to its management team “to support the next phase of its strategic delivery”.
Managing director for co-operative affairs Mike Cronin has been leading the consumer divestment process and will dedicate his focus to this critical project full time. His former role will be taken by Matt Bolger, a past executive at Fonterra who returns to the co-op next March
“Mike has been with Fonterra since 2002 and has been involved in a number of key strategic projects for the co-op,” said Hurrell. “He is a highly respected leader and industry figure … I personally value his trusted advice and strategic leadership.
“I’m also pleased to announce Matt Bolger’s appointment and look forward to welcoming him back to the co-op on 5 March.”
Bolger spent more than 18 years with Fonterra in a variety of roles, including general manager capital strategy and director of farmer services, as well as time leading global sales teams offshore.
He stepped into his current position as pro vice-chancellor of the University of Waikato Management School in 2020 and is the current chair of the Dairy Companies Association of New Zealand (DCANZ).
“Matt will be responsible for functions including farm source, global stakeholder affairs and trade, governance, risk and audit, corporate communications, legal and Māori strategy,” said Hurrell.
“As we implement our revised strategy, Matt’s knowledge of the Co-op’s farmers, stakeholder relations experience and commercial acumen will serve him well.”
