Fonterra and Nestlé have agreed to sell their Dairy Partners Americas (DPA) Brazil joint venture to French dairy company Lactalis for BRL 700 million (approx. $133 million), subject to closing transaction adjustments.
The sale, which is said to have been delayed due to pandemic-related market conditions, is aligned with the co-op’s strategy of prioritising its New Zealand milk pool.
Fonterra chief executive, Miles Hurrell, commented: “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”.
DPA Brazil has been held for sale in Fonterra’s financial statements since January 2020.
The joint venture was established by Fonterra and Nestlé in 2003 to manufacture and commercialise dairy products throughout Latin America. In 2014, DPA reoriented its focus to Brazil and chilled dairy.
Fonterra currently holds a 51% stake in the JV and Nestlé 49%. DPA operates two plants and employs around 1,300 people, marketing brands including Nestlé, Chamyto, Ninho and Chandelle in Brazil.
The deal is expected to be completed by mid-2023, subject to regulatory authority approvals.
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