Fonterra Retains Stake in Australian Operations
Source: The DairyNews
Dairy cooperative Fonterra has opted to retain its stake in its Australian business, a decision that may impact the anticipated NZD 1 billion in returns planned for shareholders.
Also Fonterra has appointed transactional advisers for the complex process of divesting some or all of its consumer businesses and brands.
Fonterra CEO Miles Hurrell stated, "While we have chosen not to divest a portion of our Australian operations, our commitment to delivering substantial capital returns to our shareholders and unitholders remains unwavering. The final amount of any capital return will be contingent upon various factors, including the successful execution of our divestment program and our ongoing debt and earnings levels."
The cooperative has emphasized its strategy to concentrate on New Zealand milk. In the company's FY22 results, Hurrell highlighted that Australia is integral to Fonterra's consumer strategy, citing the synergy of shared and complementary brands and products, as well as its role as a key market for New Zealand milk solids.
Also Fonterra has appointed transactional advisers for the complex process of divesting some or all of its consumer businesses and brands. The co-operative has enlisted Jarden, JP Morgan, and Craigs Investment Partners to assist during the preparation phase and serve as points of contact for potential buyers.
In addition to these transactional advisers, legal advisers have also been appointed, and Fonterra is currently seeking accountancy experts, according to Mike Cronin, Fonterra’s managing director of co-operative affairs.
Cronin explained to Farmers Weekly that the preparation phase involves thorough due diligence on Fonterra’s assets. This includes reviewing employment contracts, commercial agreements, relationships, intellectual property, and trademarks.
Following the appointment of advisers, it is expected to take three to four months to deliver a comprehensive report on viable divestment options. This report will cover potential countries, locations, assets, buyers, and types of divestment strategies.
Announced in mid-May, Fonterra's strategic shift is anticipated to take 12 to 18 months to complete.
The cooperative has emphasized its strategy to concentrate on New Zealand milk. In the company's FY22 results, Hurrell highlighted that Australia is integral to Fonterra's consumer strategy, citing the synergy of shared and complementary brands and products, as well as its role as a key market for New Zealand milk solids.
Also Fonterra has appointed transactional advisers for the complex process of divesting some or all of its consumer businesses and brands. The co-operative has enlisted Jarden, JP Morgan, and Craigs Investment Partners to assist during the preparation phase and serve as points of contact for potential buyers.
In addition to these transactional advisers, legal advisers have also been appointed, and Fonterra is currently seeking accountancy experts, according to Mike Cronin, Fonterra’s managing director of co-operative affairs.
Cronin explained to Farmers Weekly that the preparation phase involves thorough due diligence on Fonterra’s assets. This includes reviewing employment contracts, commercial agreements, relationships, intellectual property, and trademarks.
Following the appointment of advisers, it is expected to take three to four months to deliver a comprehensive report on viable divestment options. This report will cover potential countries, locations, assets, buyers, and types of divestment strategies.
Announced in mid-May, Fonterra's strategic shift is anticipated to take 12 to 18 months to complete.
