The sale of Fonterra and Nestlé’s Dairy Partners Americas Brazil joint venture to French dairy company Lactalis is complete.
Fonterra chief executive Miles Hurrell said when the co-op announced the sale of DPA in December 2022, it noted the sale was subject to regulatory approvals. These approvals have now been received.
“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.
Fonterra and Nestlé sold the JV for approximately $240 million and the proceeds will offset debt related to that business, which means there will be little cash impact on Fonterra’s earnings.
There is a negative foreign currency translation reserve balance of approximately $70m 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.
As with previous one-off transactions, Fonterra’s FY24 announced forecast earnings range of 45-60 cents per share will continue to reflect only the underlying performance of the business.