Fonterra's Sale of Mainland Group to Lactalis Nears Completion

Dairy giant Fonterra expects to conclude the sale of its consumer business, Mainland Group, to France's Lactalis in the first quarter of this year. The transaction, valued at $4.2 billion, is pending several regulatory approvals, with Australia's Foreign Investment Review Board recently granting its approval.

Fonterra plans to hold a special shareholder meeting on February 19 to approve a proposed capital return of $2 per share, which equates to approximately $3.2 billion upon the sale's completion. The capital return requires at least 75 percent approval of the votes cast at the upcoming meeting.

In October, farmer shareholders overwhelmingly approved the sale, which includes well-known brands such as Anchor, Mainland, and Kāpiti. The co-operative emphasized that the capital return is expected to be tax-free, though it recommends shareholders seek independent tax advice based on their individual circumstances.

Fonterra has stated that the separation of its consumer brands is progressing well. "Holding the shareholder vote on the capital return in February will enable Fonterra to return capital to shareholders and unit holders as soon as possible after the transaction is complete," the company stated.