Fonterra Co-operative Group has completed the sale of Mainland Group to French dairy giant Lactalis, closing a divestment process that began in mid-2024 when the co-op announced a strategic shift to become a pure-play global B2B dairy provider.
The transaction, valued at $3.69 billion (NZ$4.22 billion), transfers Fonterra’s global Consumer business and associated brands – including Mainland, Western Star, Perfect Italiano, and Anchor – to Lactalis, along with its integrated Foodservice and Ingredients operations in Oceania, Sri Lanka, and the Middle East and Africa.
Chair Peter McBride said the completion was a “significant milestone” for the co-operative. “With the divestment complete, Fonterra can return capital to its owners and focus on growing further through its core business as a New Zealand farmer-owned global B2B dairy provider,” McBride said.
CEO Miles Hurrell said the deal allows Fonterra to direct resources, R&D spend, and farmer capital toward its Ingredients and Foodservice businesses – sold under the NZMP and Anchor Food Professionals brands – which the co-op considers its highest-returning operations.
“The completion of the sale also signals the start of our long-term partnership with Lactalis. Lactalis becomes one of our most significant Ingredients customers, as we continue to supply milk and other products to the divested businesses,” Hurrell said.
Capital return
Fonterra will return $3.2 billion of divestment proceeds to farmer shareholders and unit holders via a $2.00 per share capital return. The record date is 5.00 pm on 9 April 2026, with payment on 14 April 2026.
To facilitate the capital return, the NZX has approved a three-day administrative trading halt on Fonterra shares and Fonterra Shareholders’ Fund units from market open on 8 April through close of trading on 10 April 2026.
Supply agreements and earnings outlook
Two long-term supply agreements underpin the post-completion relationship. Fonterra will supply raw milk to Lactalis for a minimum of 10 years under a Raw Milk Supply Agreement, and supply ingredients and bulk products including cheese under a Global Supply Agreement for a minimum of six years, both subject to automatic renewal.
Fonterra’s FY26 earnings guidance for continuing operations remains at 50-65 cents per share. The co-op is targeting a return to FY25 earnings levels by FY28, offsetting the loss of earnings from the Mainland divestment through focused execution of its B2B strategy.
Farmer shareholders approved the sale in October 2025. Regulatory clearances – including from the New Zealand Overseas Investment Office – were secured ahead of completion.
Lactalis, headquartered in Laval, France, is the world’s largest dairy company. In Australia, its brands include Pauls, Vaalia, Ski, Ice Break, Oak, and Lemnos, President, and Galbani cheeses. The $3.5 billion deal was announced in August 2024, following a competitive sales process that drew interest from Bega Cheese, FrieslandCampina, and US private equity firm Warburg Pincus.
