Meiji, Friesland Campina, Bega and Lactalis Pursue Fonterra's Australian Assets
Fonterra, a giant in the dairy industry, has officially put its Australian assets up for sale, and the announcement has caught the attention of several international and domestic firms eyeing this billion-dollar opportunity. Japanese conglomerate Meiji Holdings and Dutch giant Friesland Campina are among the potential buyers. They join industry leaders Lactalis, known as the world's largest dairy processor, and Australian firm Bega in showing interest in Fonterra's local unit.
Lactalis has already taken steps toward acquisition by applying for an informal merger clearance with the Australian Competition and Consumer Commission. Meanwhile, Bega's executive chairman, Barry Irvin, has confirmed their interest, stating that the acquisition aligns naturally with Bega's business strategy.
While Meiji and Friesland Campina's intentions have been the subject of speculation, they have yet to officially disclose their interest. According to Scott Briggs, Director at Bridgecape Commodities, Meiji and Friesland Campina’s involvement is not unexpected due to the premium, diverse advantages these assets present, ranging from food security benefits to increased trade flexibility.
Barry Irvin's statement highlights competition's importance for Australian dairy farmers, noting, "We hope to work constructively with Fonterra Group on the sale of its Oceania businesses, and Bega remains very interested." Despite concerns about reduced competition, stakeholders, including Australian Dairy Farmers president Ben Bennett, acknowledge Bega's proactive relationship-building efforts with primary producers.
In light of these developments, the future of Fonterra's Australian assets remains uncertain, though a trade sale seems more probable than an IPO. Offshore companies view Australian assets as key strategic acquisitions, reflecting broader geopolitical shifts emphasizing food security and stable trade routes in Asia.
