New Zealand-based dairy co-operative, Fonterra, and Nestlé have agreed on the sale of their Dairy Partners Americas (DPA) Brazil joint venture to French dairy company, Lactalis, for €124.8 million.
The deal is expected to be completed by mid-2023, subject to regulatory authority approvals.
Fonterra and Nestlé created DPA in 2003 to manufacture and commercialise dairy products throughout Latin America, and in 2014 it refocused its activities on Brazil and chilled dairy.
Fonterra Chief Executive, Miles Hurrell, said the sale of DPA Brazil is aligned with the cooperation’s strategy of prioritising its NZ milk pool.
“DPA Brazil has reached maturity as an investment for us, and the sale allows us to prioritise our resources to the businesses that are core to our strategy,” he said.
Hurrell said that Fonterra was pleased to have secured the sale, which had been delayed due to market conditions related to Covid-19 after being held for sale in the company’s financial statements since January 2020.
Fonterra’s previously announced FY2023 earnings guidance will continue to reflect the underlying performance of the DPA Brazil business during the pre-completion period, and Fonterra will provide an update on the overall impact of its divestment programme as part of its FY23 financial reporting.