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Fonterra Cooperative Group has announced new developments regarding its global consumer business divestment. This decision comes as part of a broader strategy to enhance value for farmer shareholders while ensuring the continued growth of its iconic brands.

Fonterra CEO Miles Hurrell said that the cooperative's decision to divest is rooted in a comprehensive analysis of value creation for farmers and the potential for growth in its foodservice and ingredients sectors.

Hurrell commented: “At the same time, we recognise the responsibility we have to find the right steward for iconic brands such as Anchor, Mainland and Western Star and an ownership structure that allows these businesses to continue to grow".

The cooperative has outlined a dual approach to divestment, exploring both a trade sale and an initial public offering as viable options. This strategic testing phase will allow Fonterra to assess the terms and potential value of both avenues before presenting a final option to farmer shareholders for a vote.

Over the coming weeks, Fonterra plans to engage with potential buyers for its Consumer and associated businesses. The company is also preparing for a possible IPO, having selected Mainland Group as the corporate brand should it proceed with public listing. This brand is not only steeped in New Zealand dairy heritage but is also recognised in key international markets.

Fonterra has appointed René Dedoncker as CEO-elect for Mainland Group. Dedoncker, who has been with Fonterra since 2005, has held various leadership roles, including managing the Australian business through a recent merger that formed Fonterra Oceania.

Paul Victor has been named CFO-elect, bringing over 30 years of experience from his previous role as Chief Financial Officer at Incitec Pivot Limited.

Fonterra's divestment strategy is poised to impact the broader dairy manufacturing sector significantly. The cooperative aims to balance maximising long-term value for farmer shareholders, enhancing its competitive edge in ingredients and foodservice, and expanding international market channels for high-quality New Zealand dairy products.

As Fonterra targets a substantial capital return for its farmer shareholders and unit holders following the divestment, dairy manufacturers should closely monitor these developments. The outcome of this process could influence market dynamics, brand positioning and competitive strategies within the dairy sector.

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