Finance
France's Lactalis strikes $2.2 billion deal for Fonterra's consumer business
Published by Global Banking and Finance Review
Posted on August 21, 2025
3 min readLast updated: January 22, 2026
Global Banking and Finance Review
Company
Published by Global Banking and Finance Review
Posted on August 21, 2025
3 min readLast updated: January 22, 2026
Lactalis acquires Fonterra's consumer business for $2.2 billion, boosting its dairy market presence. Fonterra shares surge, and a tax-free capital return is planned.
By Lucy Craymer and Scott Murdoch
WELLINGTON (Reuters) -New Zealand's Fonterra Co-operative Group said it will sell its global consumer and associated businesses to French dairy major Lactalis for NZ$3.845 billion ($2.24 billion), which sent its shares surging to a more than 7-year high on Friday.
Shares of the dairy company rose 17.1% in early trading to NZ$5.88, their highest level since February 2018.
The sale includes Fonterra's global consumer business, encompassing the operations of brands such as Mainland and Anchor butter, Kapiti ice cream and cheese and the Anlene powdered milk supplement. The deal includes long term commitments to purchase milk from Fonterra, Fonterra Chief Executive Miles Hurrell said.
The transaction also covers the dairy company's Foodservice and Ingredients businesses in Oceania and Sri Lanka, along with its Middle East and Africa Foodservice operations.
Hurrell said in an interview they had run both a trade sale and IPO process in parallel in the past 15 months and it was only in the last couple of weeks that Fonterra had really focused on the trade sale.
"Our assessment was a trade sale would give better value," he said. "A trade sale will bring synergies to the business and I think we've seen that play out with the numbers we've announced today," he said.
Sources told Reuters in May several companies, including Japan's Meiji, Canada's Saputo and Lactalis, were mulling bids for the units. U.S. private equity firm Warburg Pincus was also among the interested parties.
Fonterra said the sale price could rise by NZ$375 million if the Bega licences held by its Australian business are included.
"Combining the Fonterra consumer business operations and market leading brands with our existing footprint in Australia and Asia will allow Lactalis to further grow its position in key markets," Lactalis Chairman Emmanuel Besnier said.
Privately-held Lactalis, the world's largest dairy company, counts names such as France's brie cheese maker President and Italy's mozzarella producer Vallelata among its brands and sells everything from yoghurt to flavoured milk and desserts.
Fonterra is targeting a tax-free capital return of NZ$2 per share following the sale's completion, it said. It is also hoped to grow its ingredients brands and selling high-end ingredients to other companies.
"That's where you'll see us continue to innovate and put more of our farmers capital to grow those businesses that get a stronger return long term," Hurrell said.
The deal, subject to approval from Fonterra's farmer shareholders and regulatory authorities, is expected to close in the first half of 2026. A shareholder vote is due to be held in late October to approval the sale, Hurrell said.
Australia's competition watchdog has already said it would not oppose any potential bid by Lactalis after concluding an informal probe into the deal.
($1 = 1.7197 New Zealand dollars)
(Reporting by Himanshi Akhand in Bengaluru; Scott Murdoch in Sydney; Lucy Craymer in Wellington. Editing by Sonali Paul and Stephen Coates)
The deal is valued at NZ$3.845 billion, which is approximately $2.24 billion.
The sale includes brands such as Mainland and Anchor butter, Kapiti ice cream and cheese, and the Anlene powdered milk supplement.
A shareholder vote is due to be held in late October to approve the deal.
Lactalis aims to combine Fonterra's consumer business operations with its existing footprint in Australia and Asia to enhance growth in key markets.
Fonterra is targeting a tax-free capital return of NZ$2 per share following the completion of the sale.
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