Fonterra Co-operative Group Ltd provided an update on its work to explore potential divestment options for its global consumer business and integrated businesses Fonterra Oceania and Fonterra Sri Lanka.
CEO Miles Hurrell said that following a detailed scoping phase, the Co-op has decided to proceed with the sale process for these businesses.
“Since our announcement in May 2024, we have been working with our advisors to assess potential divestment options, the assets and businesses in scope, and the best pathway to maximise value for our Co-op,” said Hurrell.
“This work, coupled with the confidence we have in our revised strategic direction, has confirmed a divestment of our global Consumer and associated businesses is in the best interests of the Co-op.”
This revised strategy will see Fonterra prioritise its Ingredients and Foodservice businesses, creating a more focused, higher-performing Co-op.
Hurrel added that they had received meaningful buyer interest in the businesses in scope for divestment, which was a testament to their strength and potential.
Through the scoping phase, Fonterra has assessed both a trade sale and IPO as attractive divestment options and will now prepare for a sale process to pursue both options.
Advisors have been selected to assist in managing this process.
They will also thoroughly test the terms and value of a trade sale and IPO with the market before seeking support from farmer shareholders for a divestment option through a vote.
A final decision on which divestment pathway to pursue will be based on several factors, including which option will result in optimal long-term value for the Co-op.
Fonterra will provide updates over the coming months as this programme of work progresses and continues to target a significant capital return to be made to farmer shareholders and unit holders following the divestment.
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