New Zealand-based Fonterra has announced that it has received significant buyer interest in its Sri Lanka unit and global consumer division as part of its ongoing exploration to sell off these assets. Earlier this year, Fonterra revealed plans to exit the consumer (retail) business to focus on ingredients and food service distribution channels.
Fonterra’s Chief Executive, Miles Hurrell, stated that the interest shown by potential buyers highlights the strength and potential of the businesses involved in the divestment. “We have received meaningful buyer interest in the businesses in scope for divestment, which is testament to their strength and potential,” Hurrell said.
As part of the divestment process, Fonterra is considering both a trade sale and an IPO as attractive options. The company is now preparing for a sale process that will explore both avenues. Advisors are currently working on the divestment strategy.
“We will thoroughly test the terms and value of both a trade sale and IPO with the market before seeking support from farmer shareholders for a divestment option through a vote,” Hurrell added. The final decision on which divestment pathway to pursue will depend on various factors, including which option maximizes long-term value for the Co-op.