Fonterra Co-operative Group CEO, Miles Hurrell, said the co-op is still pursuing a divestment of its consumer business and integrated businesses Fonterra Oceania and Sri Lanka, considering a trade sale or an Initial Public Offering (IPO).
“We announced in November 2024 that we are pursuing both a trade sale and (IPO) as potential divestment options. Our intention is to thoroughly test the terms and value of both a trade sale and IPO before selecting an option to put to farmer shareholders for a vote,” Hurrell said.
He added that the divestment was driven by wanting to create the most value for farmers and where there is room for growth in the business.
In September, the group released a revised strategy to focus on its ingredients and foodservice business units and divest its consumer business along with its recently integrated Fonterra Oceania and Sri Lanka businesses.
The integration move was announced in May as part of a “step change” for the co-op.
“We are clear on our strategy and have a pathway to grow further value for farmer shareholders and the New Zealand economy through our innovative Foodservice and Ingredients businesses.
“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,” he said.
IPO preparation
Hurrell said they would be talking to potential buyers in the coming weeks, and also announced management changes for a potential IPO.
Mainland Group would be the corporate brand, giving a nod to its New Zealand dairy heritage as well as existing consumer brand awareness.
Current Fonterra’s MD Global Markets Consumer and Foodservice, René Dedoncker, has been named CEO-elect. Dedoncker led the Australian business from 2017 and through the recent merger.
Paul Victor has been announced as CFO-elect; he has joined the co-op from ASX-listed Incitec Pivot Limited where he was CFO.
“Paul brings more than 30 years of experience, working across functions including finance, treasury, tax, financial planning and analysis, control, M&A, investor relations and IT,” Hurrell said.
“René and Paul are very capable leaders with the experience to take these businesses forward into their next phase. Both will lead roadshow meetings with potential investor groups, commencing in March.
“We recognise the ongoing interest in the divestment process and will provide further updates as we make progress,” said Hurrell.
