Fonterra said it would sell its Farm Source livestock division to family-owned national rural services company Carrfields Livestock, effective from March 1.
The sale price was not disclosed.
Farm Source stores director Richard Allen said the decision to sell was made in the context of a larger review underway within Fonterra.
"In the context of the review of the co-op's assets and investments, we have made the decision to sell the livestock division to Carrfields Livestock," Allen said in a statement.
"While Farm Source's livestock division has contributed positive returns since inception, we believe the investment required to maintain and grow this division can be more effectively targeted towards improving core areas of the Farm Source business," Allen said.
Craig Carr, Carrfields managing director, said the acquisition was a strategic opportunity for Carrfields Livestock to fill gaps in its current national network.
This acquisition will take the Carrfields Livestock team to over 150 livestock agents across the country.
Farm Source said it would help the small number of employees, who did not have the option to transition over to Carrfields Livestock, to find new opportunities within Fonterra.
Fonterra launched Farm Source in 2014 as a farmer-facing brand, providing service, support, rewards, digital technology, online shopping and financial options for farmers.
Farm Source livestock has about 25 agents across the country.