Potential buyers Lactalis, Bega Cheese step up for Fonterra’s consumer business

The sale of Fonterra's consumer business – including Anchor, Kāpiti and Mainland – has been in the works for a year. Photo / AFP

By Anan Zaki of RNZ

• Lactalis and Bega Cheese are leading contenders for Fonterra‘s consumer operations, including Anchor and Kāpiti.
• Lactalis has applied for an informal merger clearance from the Australian Competition and Consumer Commission.
• Fonterra’s sale plan remains unchanged despite a legal tussle with Bega Cheese over trademark control.

The contenders for Fonterra’s consumer operations are becoming clearer, with leading dairy companies looking to get a slice of its prized assets.

Lactalis – the world’s biggest dairy company – is interested, with Australia’s Bega Cheese, backed by billionaire Andrew Forrest, also in the mix.

Australia’s competition regulator, the Australian Competition and Consumer Commission (ACCC), said it has received an application from France’s Lactalis for an informal merger clearance to buy Fonterra’s businesses.

“The ACCC’s review will consider the competitive effect of the proposed acquisition in Australia,” it said.

In a statement, Lactalis told RNZ no deal has been done with Fonterra.

“We would envisage many interested parties would participate in the sale process,” it said. “Several pre-emptive steps are standard before any agreement being considered and Lactalis have not signed an agreement.”

The sale of the consumer business – which includes Anchor, Kāpiti and Mainland – has been in the works for a year and the co-op has been on the road for the past month informing potential bidders.

It is tight-lipped about who might be interested, repeating earlier comments that potential buyers may pre-emptively seek regulatory approvals.

Australian dairy company Bega Cheese has openly expressed its interest, saying it is a natural buyer for the Fonterra businesses.

But it is locked in a tussle with Fonterra about who has control of Bega Cheese trademarks if a sale goes through.

Last week, the Supreme Court of New South Wales dismissed a case filed by Fonterra over trademark licensing agreements with Bega Cheese, saying it did not have jurisdiction to make a declaration on a deal which did not exist.

Fonterra said the decision did not change its plan to sell the consumer business, which could be sold as one entity, as individual businesses, or be publicly listed.

The co-op said it received “meaningful buyer interest” in the businesses in line for sale, and few potential buyers have publicly declared interest.

Other major dairy companies that may be interested include Swiss multinational Nestle and France’s Danone.

– RNZ