Lactalis Buys Fonterra's Consumer Business for $2 Billion

French mega dairy Lactalis continues its buying spree, agreeing to buy New Zealand dairy co-op Fonterra Laval’s consumer business. Price was not disclosed in the announcement but Reuters says it’s US$2.24 billion.

The deal strengthens Lactalis’s presence in Oceania, Southeast and Middle East – but does not include Fonterra’s business in China. Fonterra announced its intent to sell the business in June 2024, calling it “a step-change in its strategic direction” as it concentrates on sales of dairy ingredients.

Following a strategic review, “We believe we can grow further value for the co-op by focusing on being a B2B dairy nutrition provider, working closely with customers through our high-performing Ingredients and foodservice channels,” Fonterra CEO Miles Hurrell said at the time. “In this context, we are exploring divestment options for our global consumer business as well as our integrated businesses Fonterra Oceania and Fonterra Sri Lanka.”

The acquisition encompasses such brands as Mainland, Anchor, Perfect Italiano, Western Star, Ratthi, Cheesdale, Fernleaf, Anlene and Anmum, plus 16 manufacturing facilities in Australia, New-Zealand, Sri-Lanka, Malaysia, Indonesia and Saudi Arabia with 4,300 employees.

Lactalis Australia already has 15 manufacturing facilities and more than 2,500 employees across the country.

“Fonterra farmers will continue to benefit from their success, with Lactalis to become one of our most significant Ingredients customers,” Hurrell said this week.

Lactalis, a privately held, family-controlled business, has been busy buying things lately. It first established a North American beachhead with the 2011 purchase of Parmalat’s Canadian business. Since, it has bought Siggi’s and Stonyfield yogurts, then Kraft-Heinz’s considerable cheese business and just completed (in July) the acquisition of General Mills’s U.S. yogurt business, renaming that unit Midwest Yogurt.