Fonterra and Nestlé have completed the sale of their joint venture, Dairy Partners Americas (DPA) Brazil, to the French dairy company Lactalis.
Fonterra held a 51% ownership in the DPA Brazil JV, while Nestlé held a 49% ownership stake.
The sale was first announced in December last year, but it was subject to regulatory authority approvals. The JV was sold for BRL 700 million (approx. $133 million).
According to Fonterra, “these proceeds offset debt related to that business, which means there will be little cash impact on Fonterra’s earnings”.
“There is a negative foreign currency translation reserve balance of approximately $70 million related to Fonterra’s ownership of the DPA Brazil asset, which will be reflected as a non-cash accounting reclassification in Fonterra’s profit and loss statement.”
Fonterra CEO Miles Hurrell said: “With our decision to focus on our New Zealand milk pool, the sale of DPA Brazil means we can prioritise our resources to the businesses that are core to our strategy”.
Final transaction proceeds are still subject to customary post-completion adjustments.
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