France: Lactalis to acquire Fonterra’s consumer unit in €1.9 billion deal

New Zealand-based dairy firm Fonterra has announced it has agreed to sell its global Consumer business unit and associated businesses to French peer Lactalis for an enterprise value of 3.85 billion NZD ($2.25 billion), subject to shareholder and regulatory approvals.

The deal covers Fonterra’s global Consumer business (excluding Greater China), its Consumer brands, the integrated Foodservice and Ingredients operations in Oceania and Sri Lanka, and the Middle East and Africa Foodservice business.

The transaction value could rise through the potential inclusion of Bega licences in Australia, bringing the total to 4.22 billion NZD ($2.47 billion).

Under the agreement, Fonterra will continue supplying milk and other products to the divested businesses.

Commenting on the deal, Fonterra CEO Miles Hurrell said: “As the world’s largest dairy company, Lactalis has the scale required to take these brands and businesses to the next level. Fonterra farmers will continue to benefit from their success, with Lactalis to become one of our most significant Ingredients customers”.

Lactalis CEO Emmanuel Besnier added: “With this acquisition, we significantly strengthen our strategy across Oceania, Southeast Asia and the Middle East. Combining the Fonterra consumer business operations and market leading brands with our existing footprint in Australia and Asia will allow Lactalis to further grow its position in key markets”.

Source: Fonterra