Fonterra has sold its Chilean business, Soprole, for $1.055 billion to Gloria Foods, a dairy market leader in Peru.
Fonterra chief executive Miles Hurrell said that the divestment process for the Soprole business formally commenced in April 2022, following the launch of Fonterra’s strategy to 2030.
“A key pillar of our strategy is to focus on New Zealand milk. Soprole is a very good business but does not rely on New Zealand milk or expertise. We are now at the end of the divestment process and have agreed to sell Soprole to Gloria Foods.”
The Peruvian company also has operations in Bolivia, Puerto Rico, Argentina, Colombia and Uruguay.
Fonterra and Gloria Foods have a longstanding commercial relationship in South America.
Hurrell said that Fonterra has a long history in Chile and is pleased to have reached agreement with Gloria Foods, which also has a proud dairy history in South America.
Fonterra, he said, is delighted to pass on the Soprole business to a committed new owner with a strong regional focus on growth.
The Fonterra board intends to make a final decision on the amount and timing of any capital return once the sale agreement is unconditional, cash proceeds are received in New Zealand and having regard to other relevant factors including Fonterra’s debt and earnings outlook at the time.
Fonterra’s previously announced FY23 earnings guidance will continue to reflect only the underlying performance of the Soprole business during the pre-completion period.
Fonterra will provide an update on the overall impact of its divestment programme as part of its FY23 financial reporting.