Fonterra Sells Mainland Group to Lactalis for $4.22 Billion

Fonterra's farmer shareholders have given their approval for the sale of the Mainland Group, which includes Fonterra's global Consumer and associated businesses, to the French dairy company Lactalis for a sum of $4.22 billion. This decision was made during a virtual Special Meeting, with 88.47% of the votes cast in favor of the divestment.

Fonterra's chairman, Peter McBride, highlighted the active participation of farmer shareholders, noting that discussions had intensified since the announcement of the divestment in May 2024. According to McBride, 'The strong mandate we received reflects our farmers’ commitment to shaping the future of their cooperative.' The participation rate was high, with 80.59% of milk solids voted in favor, indicating robust support among the cooperative’s members.

The divestment signifies a major shift for Fonterra, enabling the cooperative to focus on its core strengths while streamlining operations. McBride stated that this transition would lead to a simplified and more focused business model. The transaction is subject to obtaining necessary regulatory approvals and completing the separation of the Mainland Group from Fonterra, both of which are currently in progress.

Upon completion of the sale, which is anticipated in the first half of 2026, Fonterra plans to distribute $2 per share to its shareholders and unit holders, totaling a capital return of approximately $3.2 billion. However, this capital return will require a further shareholder vote, with details on the timing and process expected to be announced in early December.

This sale marks one of several strategic divestments in the dairy sector, aligning with global trends of consolidation and specialization within the industry.