Australia’s antitrust authority has initiated an informal review of Lactalis’ potential acquisition of select Fonterra assets, despite the French dairy company not having formally confirmed an offer. The move signals that the review process has begun at an early stage, in anticipation of a possible transaction involving Fonterra’s global consumer business, Fonterra Oceania, and Fonterra Sri Lanka. While Lactalis has not yet made a public announcement, Fonterra previously stated in April that certain interested parties had progressed far enough in the due diligence process to seek regulatory clearance — a standard procedure ahead of any formal agreement.
In November, Fonterra, a New Zealand-based dairy cooperative, announced strategic plans to either sell or list specific units. The decision forms part of a broader restructuring strategy aimed at concentrating on its core milk processing operations. The businesses now under review include those that process and distribute dairy products from raw milk across various regions, including Australia and Sri Lanka.
While the Australian Competition and Consumer Commission (ACCC) has not publicly commented on the matter, its informal review suggests that it is evaluating the potential competitive impact of a future deal. The process may consider market share implications, pricing power, and supply chain concerns in the regional dairy sector. Fonterra, when approached for updates, reiterated its April position and did not provide further details on current negotiations or timelines. Likewise, Lactalis and the ACCC have not issued any additional statements regarding the matter.
The potential acquisition is estimated to be valued at around NZ$4 billion, or approximately $2.37 billion USD. This valuation reflects the scale and profitability of the businesses involved. According to Fonterra’s financial disclosures in May 2024, the assets under consideration for divestment contributed nearly 19% of the company’s total operating earnings in the first half of fiscal year 2024. This underscores the significance of the units within Fonterra’s broader business portfolio and the potential impact of their sale on the company’s financial profile and future direction.
Other international players such as Japan’s Meiji are also reportedly exploring bids, indicating strong global interest in the assets. The outcome of the ACCC’s informal review and any resulting regulatory requirements could play a pivotal role in shaping the structure and timing of any eventual transaction.
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