Australia is Fonterra's largest milk pool outside New Zealand and continues to grow, with milk volume growing to 2 billion litres from 1.6 billion last season. Fonterra has a waiting list of new suppliers wanting to come on board, Dedoncker said.
Murray Goulburn said Saputo would acquire all of the operating assets and operating liabilities of the company, which in August reported a A$371 million loss for 2016/7.
The transaction includes milk supply commitments for Murray Goulburn suppliers totalling about A$114m.
This would enable a step up of A40c per kg milk solids to A$5.60 per for the full year 2018 farm-gate milk price.
An addditional A40c per kg loyalty payment would also be paid to active Murray Goulburn suppliers.
The co-operative is under investigation by Australian authorities over last year's milk pricing, which was pitched too high relative to world market conditions.
Murray Goulburn said it would retain all assets and liabilities associated with the its ASX-listed MG Unit Trust and any liability in relation to the current ACCC proceedings, Asic investigation and unit holder class action, and any similar such actions.
"For this reason Murray Goulburn will retain part of the proceeds of the transaction until the conclusion of these matters," it said.
"Further cash distributions will be made following such conclusion, or earlier if appropriate."
The transaction, which will be put before the co-operative's annual meeting in Melbourne today, is subject to regulatory consents.
Fonterra confirmed last month that it had made an indicative, non-binding proposal to the board of Murray Goulburn.
