Fonterra sells shared silverware with RFC

Fonterra has sold its stake in DFE Pharma, a joint venture with FrieslandCampina(RFC), for $401 million. As a result, the ailing New Zealand dairy cooperative is once again selling silverware.

Fonterra's interest in DFE Pharma has been taken over by CVC Strategic Opportunities. In March, Fonterra already announced DFE Pharma, a company specializing in various excipients for medicines, to want to sell. 

When asked, FrieslandCampina stated that it strongly believed in DFE Pharma's growth prospects, but had nevertheless decided against acquiring Fonterra's interest.  

Bad results
The reason that Fonterra is selling the interest is related to the large loss figures of the dairy cooperative. The annual figures for 2018/2019 will be presented later this week, but it leaked earlier that the loss probably in the hundreds of millions.

That is why Fonterra is going to cut its workforce, while the member dairy farmers will not receive a dividend for the first time in history. With the sale of DFE Pharma, among other things, Fonterra wants to raise money to compensate for the loss. Ice cream producer Tip Top was also sold in April. 

Wouter Job

Wouter Baan is Head of Meat & Dairy at BoerenbusinessAt DCA Market Intelligence, he focuses on dairy, pork, and meat markets. He also monitors (business) developments within agribusiness and interviews CEOs and policymakers.

w.baan@boerenbusiness. Nl

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