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Fonterra’s farmer shareholders have overwhelmingly approved the sale of its global Consumer and associated businesses, known as the Mainland Group, to French dairy giant Lactalis for $4.22 billion.

The approval came during a virtual Special Meeting this week, where 88.47% of the votes cast supported the divestment.

Fonterra chairman Peter McBride highlighted the high level of engagement from farmer shareholders leading up to the vote, noting that discussions had intensified since the divestment was first announced in May 2024.

“The strong mandate we received reflects our farmers’ commitment to shaping the future of their cooperative,” McBride stated. “This process has demonstrated the unique nature of our cooperative model, where our farmers have a direct say in key decisions.”

The participation rate was notable, with 80.59% of milk solids voted in favour of the proposal, indicating robust support among the cooperative's members.

McBride noted that the decision to divest was not made lightly, as the board carefully considered the strategic implications and the cooperative's strengths in creating value for its farmer owners.

The divestment of the Mainland Group marks a significant shift for Fonterra, allowing the cooperative to streamline its operations and focus on its core strengths.

McBride expressed optimism about this new phase: “We will be able to concentrate Fonterra’s energy on where we excel, resulting in a simplified and more focused business model”.

The transaction is contingent upon obtaining the necessary regulatory approvals and completing the separation of the Mainland Group from Fonterra, both of which are currently underway.

The cooperative anticipates that the sale will be finalised in the first half of 2026.

Upon completion of the sale, Fonterra plans to return $2 per share to its shareholders and unit holders, amounting to a total capital return of approximately $3.2 billion.

This capital return will require a subsequent shareholder vote, with details on the timing and process expected to be announced in early December.