Fonterra and Nestlé have completed the sale of their joint venture, Nestlé’s Dairy Partners Americas (DPA) Brazil, to the French dairy company Lactalis.
Fonterra owned 51 per cent and Nestlé 40 percent of the JV, which they sold for BRL 700 million (AU$220 million).
Fonterra CEO Miles Hurrell said there would be little impact on Fonterra’s earnings as proceeds would offset debts related to DPA Brazil.
There is a negative foreign currency translation reserve (FCTR) balance of approximately NZ$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, the company 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,” Hurrell said.
In November last year, Fonterra sold its Soprole dairy business to Gloria Foods for NZ$1 billion.
Nestlé and Fonterra are also working together on a five-year project to develop a commercially viable net zero carbon emissions dairy farm. It’s being run with Dairy Trust Taranaki with the goal of cutting emissions by 30 per cent by mid-2027 and a 10-year goal of net zero carbon emissions.
