Fonterra sells Aust business to private equity

Fonterra sells Australian business to private equity firm

By Jason Krupp

Oct. 21 (BusinessDesk) – Global dairy exporter Fonterra Cooperative Group signed a binding agreement to sell its Brownes business to a dairy group owned by private equity firm Archer Capital, saying it would be better served by owners with a regional focus.

The agreement with DairyWest, which is conditional on the transfer of key contracts and the finalisation of the transitional arrangement, will become effective early next year. All Brownes employees and exiting farm arrangements in Western Australia, including farmgate pricing, will transfer with it.

“Brownes dairy business is a profitable business, with strong brands, consumer loyalty and a track record for innovation,” said John Doumani, managing director of Fonterra Brands Australia New Zealand.

“Fundamentally Brownes is a regional business and it is not receiving the right level of focus within Fonterra given our decision to focus on national leadership in our priority categories of cheese, spreads, yoghurts and dairy desserts in Australia. Subsequently, the Brownes business will be better served as a stand-alone entity.”

Fonterra said it remains committed to Western Australia through its existing brands, such as Mainland, Bega, Perfect Italiano, Western Star, Nestle Ski and Nestle Diet.

The sale comes just a day after the world’s biggest exporter announced a new $42 million farm planned for China.

Brownes manufactures and sells white milk, flavoured milk, yoghurt, dairy desserts, cream, custard, juice and bulk cheese, and owns the Balcatta and Brunswick manufacturing sites.

(BusinessDesk)

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