Chairman Peter McBride said the Board and management team were encouraged by the level of engagement from farmer shareholders in the lead-up to the vote.
Fonterra’s farmer shareholders have given the go-ahead for the Co-operative to sell its global Consumer and associated businesses, Mainland Group, to Lactalis for NZD 4.22 billion.
“We’ve been pleased to see so many farmers joining in the discussions since the start of this process in May last year, when we first announced the decision to explore divestment options, and especially over the past month or so when the full details have been available,” said McBride.“
“It helps to demonstrate one of the key things that sets us apart from most other processors; our farmers have a direct say in the future of their Co-operative, and they’ve made the most of that opportunity.”
McBride was pleased to have received a strong mandate, with 88.47 percent of the total farmer votes cast in support of the recommendation and 80.59 percent participation based on milk solids voted.
“We want to thank all farmer shareholders who voted.”
McBride added that the decision to divest the Mainland Group businesses was significant and one that the Board did not take lightly.
“We have examined the strategic context we operate in, our strengths and how, as a Co-op, we create value for our farmer owners.”
The divestment will usher in an exciting new phase for the Co-op, allowing it to focus its energy and efforts on where it does its best work.
“We will have a simplified and more focused business, the value of which cannot be overstated.”
The threshold required to approve the sale was for more than 50 percent of the votes from those entitled to vote (based on share-backed kgMS) and who actually voted in favour of the proposal.
Completion of the divestment remains subject to securing certain regulatory approvals and the separation of Mainland Group business from Fonterra, both of which are well underway.
Subject to these steps being completed, Fonterra expected the transaction to be completed in the first half of 2026.
Fonterra has targeted a tax-free capital return of NZD two per share to shareholders and unit holders, equivalent to NZD 3.2 billion, once the sale is complete.
Another shareholder vote will be required to pay the capital return. The process for that capital return is expected to be by way of a scheme of arrangement under Part 15 of the Companies Act 1993.
The Co-op plans to provide more details on the timing and process for the capital return in early December.
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