Fonterra sells stakes in two Chinese farms

--FILE--People visit the stand of Fonterra Cooperative Group Ltd during a dairy products exhibition in Beijing, China, 12 September 2013. Global dairy cooperative Fonterra will buy a 20-percent stake in Chinese dairy giant Beingmate to increase its access to China's infant milk market, Beingmate has announced. The Shenzhen-listed firm said on Monday (8 September 2014) evening that Fonterra will invest 3.68 billion yuan (599 million U.S. dollars) to become Beingmate's major shareholder. After the share transfer, Beingmate and Fonterra will build a joint-venture milk powder factory in Victoria, Australia. Beingmate will invest more than 185 million U.S. dollars in the factory, in which it will have a 51-percent ownership, it said.

Fonterra Co-Operative Group said today it will sell its stakes in two joint-venture farms in China’s Shandong province to Singapore-based AustAsia Investment Holdings for NZ$88 million (US$62 million).

The sale comes amid a retreat by the world’s largest dairy exporter since 2019 from an ill-fated overseas expansion that drew sharp criticism from its 10,000-plus farmer-shareholders.

Fonterra, which owns 51 percent of the two farms, said the sale is not subject to any regulatory approvals and is unconditional.

AustAsia, 75 percent owned by Singaporean agri-food company Japfa, will buy the farms outright for US$115.5 million, with the difference being paid to Fonterra’s joint venture partner, the New Zealand co-operative said.

“Greater China continues to be one of our most important strategic markets. We remain committed to our China business,” CEO Miles Hurrell said in a statement.

The dairy giant in April sold two fully-owned farms in China to Inner Mongolia Youran Dairy for NZ$552 million.