Fonterra Sells Anchor And Mainland Brands

Fonterra to sell Consumer businesses to Lactalis for $3.845 billion, pending shareholder approval
Co-op plans $2.00 per share tax free return to farmers after sale completion
Sale expected to complete in 2026, with long-term supply deal in place

Fonterra has confirmed it will sell its Consumer and associated businesses to global dairy giant Lactalis for $3.845 billion NZD. The agreement is subject to several conditions, including the approval of Fonterra’s farmer shareholders, separation of the businesses, and various regulatory consents.

The deal includes Fonterra’s Consumer business (excluding Greater China), the Oceania and Sri Lanka Foodservice and Ingredients units, and the Middle East and Africa Foodservice operations. If Bega licences held by Fonterra’s Australian arm are included, the sale’s value could rise to $4.22 billion.

Fonterra is targeting a capital return of $2.00 per share—totalling around $3.2 billion—to its farmer shareholders. The return would only happen after the sale is complete and the funds are received in New Zealand. A separate shareholder vote will decide the return once the sale is finalised.

As part of the agreement, Fonterra will continue to supply milk and ingredients to the divested businesses, ensuring that iconic brands like Anchor and Mainland still use New Zealand milk.

Fonterra Chairman Peter McBride said the decision followed over a year of evaluating divestment options, including an IPO. “Following a highly competitive sale process with multiple interested bidders, the Fonterra Board is confident a sale to Lactalis is the highest value option for the Co-op, including over the long-term.”

CEO Miles Hurrell added, “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.”

Lactalis CEO Emmanuel Besnier also welcomed the deal, stating, “With this acquisition, we significantly strengthen our strategy across Oceania, Southeast Asia and the Middle East.”

The transaction involves the sale of shares in Mainland Group Holdings Limited, which currently holds the Consumer and related businesses. It is conditional on regulatory approvals from New Zealand’s Overseas Investment Office, Australia’s Foreign Investment Review Board, and other international bodies. The Australian Competition & Consumer Commission has already confirmed it will not oppose the acquisition.

The sale is also dependent on the businesses being successfully separated from Fonterra and no major adverse changes occurring before completion. Fonterra expects the transaction to be finalised in the first half of 2026.

A Special Meeting will be held in late October or early November to seek shareholder approval for the divestment. The Notice of Meeting, due in early October, will detail the financial implications and outline the proposed capital return.

Fonterra’s current FY25 earnings forecast of 65-75 cents per share remains unchanged. FY26 guidance will be issued with the FY25 Annual Results in September 2025. The company said the FY26 earnings will reflect ongoing operations only, excluding performance from the businesses being sold.

Fonterra’s Annual Meeting has been moved from November to December 2025, with a date to be announced soon.

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