Source: Radio New Zealand
More than 98 percent of the co-op’s 8000 shareholders voted in favour of the capital return scheme resulting from the divestment of Mainland Group. 123rf / Supplied images
The multi-billion-dollar sale of dairy co-operative Fonterra’s consumer brands business is one step closer, as shareholders overwhelmingly approve another regulatory hurdle to the international deal.
More than 98 percent of the co-op’s 8000 shareholders voted in favour of the capital return scheme resulting from the divestment of Mainland Group, at a special meeting this morning.
In October, shareholders approved the proposal to sell the consumer brands business – behind well-known brands like Anchor, Kāpiti, Perfect Italiano and Fresh’n Fruity – to French dairy giant Lactalis.
This week’s vote was one of the various approvals needed for the international transaction of $4.22 billion to be completed, with more to go.
Fonterra’s board recommended its shareholders vote in favour of the payment schedule for the Mainland Group sale. PHOTO/Screenshot
Shareholders would receive $3.2 billion once the sale was complete in one lump sum, while up to $1 billion would go back into the co-op.
Board chairman Peter McBride said in the meeting that the sale process was progressing, before an expected completion by the end of next month.
“Your co-op has been working to deliver the proposed capital return as quickly as possible,” he said.
“We are targeting a tax-free capital return of $2 per share to shareholders and unit holders, equivalent to around $3.2 billion, once the sale is complete.”
Fonterra chairman Peter McBride. RNZ/Marika Khabazi
McBride said shareholders did not have to do anything to prepare, as the co-op would ensure their shares ahead of the deal remained unchanged.
“Subject to approval by shareholders, settlement of the transaction and receipt of final court orders, the co-op continues to expect the transaction to be complete in the first quarter of this calendar year.
“That is, by 31 March 2026,” he said.
A co-op spokesperson said it planned to invest up to $1 billion it would get from the sale into value-add projects across ingredients and foodservice, including the butter factory expansion at Clandeboye.
Fonterra co-operative chair and Wairarapa cocky John Stevenson said farmers would likely bank their dividends and pay down debt with the cash injection.
He said farmers will also keep a close eye on how Fonterra executes its new strategy as a global dairy ingredients supplier.
“I’m not surprised, I think the original vote on whether to divest or not was certainly the one where farmers put significant effort into understanding the proposal in front of them,” he said.
“Whilst an important part of the process is essentially in farmers’ minds re-confirming that they’re happy with the outcome of that in terms of the capital return and happy for Fonterra to continue in that direction.”
The payment would result in a lump sum payment for shareholders after the subdivision.
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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand
