Fonterra Co-operative Group Ltd has provided an update on the process of divesting its global consumer business and integrated businesses in Fonterra Oceania and Sri Lanka.
Fonterra CEO Miles Hurrell said the Co-op’s decision to pursue a divestment was based on its understanding of where it created the most value for farmers and where there was further room for growth.
“We are clear on our strategy and have a pathway to grow further value for farmer shareholders and the New Zealand economy through our innovative food service and ingredients businesses,” said Hurrell.
“At the same time, we recognise the responsibility we have to find the right steward for iconic brands such as Anchor, Mainland and Western Star and an ownership structure that allows these businesses to continue to grow.”
Hurrell added that Fonterra announced in November 2024 that it considered a trade sale and Initial Public Offering (IPO) as potential divestment options.
“Our intention is to thoroughly test the terms and value of both a trade sale and IPO before selecting an option to put to farmer shareholders for a vote. Ahead of that, we are today indicating the next steps that are required in both processes.”
Over the coming weeks, Fonterra will engage with potential buyers of the consumer and associated business as part of the trade sale process.
As part of preparing for a potential IPO, Fonterra has named key management team members and chosen a corporate brand for the entity if it is to be publicly listed.
Fonterra has chosen Mainland Group as its corporate brand if it is to proceed with an IPO. The Mainland brand has a strong New Zealand dairy heritage and is well-known by consumers in New Zealand, Australia, and many other global markets.
René Dedoncker has been named as CEO-elect for Mainland Group. He is currently Fonterra’s Managing Director of Global Markets Consumer and Foodservice, leading the businesses in scope for divestment.
Dedoncker joined Fonterra in 2005 and has held several global leadership positions since then. He has led the Australian business since 2017, including its recent merger with Fonterra Brands New Zealand to form Fonterra Oceania.
The co-op has also appointed Paul Victor as CFO-elect for Mainland Group. He has joined Fonterra from ASX-listed Incitec Pivot Limited, where he was Chief Financial Officer and will bring more than 30 years of experience, working across functions including finance, treasury, tax, financial planning and analysis, control, M&A, investor relations and IT.
“René and Paul are very capable leaders with the experience to take these businesses forward into their next phase. Both will lead roadshow meetings with potential investor groups, commencing in March.”
Hurrell added that he recognised the ongoing interest in the divestment process and would provide further updates as it progressed.
Fonterra’s chosen option will balance maximising long-term value for farmer shareholders, including the best return on capital invested, cementing Fonterra’s competitive advantage in ingredients and food service, and expanding international channels to market for high-quality New Zealand dairy.
The co-op has continued to target a significant capital return to be made to farmer shareholders and unit holders following the divestment.
