Goodman Fielder plans to sell its Invercargill food ingredients export business to an Australian-owned company.
The multi-million dollar business, employing around 90 staff, makes frozen and chilled pastry, sauces and pre-mixes, mainly for export to Japan.
It is the largest business of its type in New Zealand and Australia,and has a reputation for quality products.
The company was founded by two Invercargill residents as a bakery more than 100 years ago.
Since the 1980s it has been run by Quality Bakers and then Goodman Fielder.
The new owners will be Invercargill Trading, which was registered as a company in New Zealand only last week.
Its three directors are New South Wales residents.
The company's two shares are held by Sydney-based Roslyndale Pty.
Goodman Fielder NZ managing director Ron Vela said the new owners had extensive experience in the New Zealand food industry and had strong connections across various export markets.
"Invercargill Trading has stated its desire to expand the site's operations and is firmly committed to growing Southland's export sales, which should provide growth opportunities for the area," he said.
Goodman Fielder appears to have had more luck with its Southland deal that with its attempt to sell its Leiner Davis gelatin business.
It is seeking $379 million for Leiner Davis, but faces a US Federal Trade Commission challenge.
A spokeswoman for Goodman Fielder declined to put a value on the Southland sale.
But she said a contract was signed on Thursday and no hold-ups were expected before the deal was completed early next month.
Mr Vela said the sale of the production facility of non-retail branded products in Invercargill was in line with Goodman Fielder's strategy of focusing on its retail branded products.
Joe Bagrie, an Invercargill City councillor who also buys products from the plant for export to Japan, said the deal was likely to delight the city and the factory's staff.
He had met the new owners during the due diligence process and they appeared to intend returning the business to local control.
Mr Bagrie said the business was a multi-million dollar one which capitalised on New Zealand's reputation for quality dairy exports.
It had a reputation for quality among discerning Japanese buyers, he said.
Goodman Fielder has been planning a $A100 million ($122.4 million) share buyback since November.
It said this week it intended to continue, with or without the sale proceeds of Leiner Davis.
