Fonterra moves to divest consumer business, eyes IPO under Mainland Group

NEW ZEALAND – Fonterra Cooperative Group has announced new developments regarding divesting its global consumer business, designating it as Mainland Group in anticipation of a potential initial public offering. 

The move is part of a broader strategy to enhance value for farmer shareholders while ensuring continued growth for its well-known dairy brands.

Fonterra CEO Miles Hurrell stated that the decision follows an extensive evaluation of how best to generate long-term value for farmers while strengthening the cooperative’s focus on its food service and ingredients sectors. 

He said, “At the same time, we recognise the responsibility to find the right steward for iconic brands such as Anchor, Mainland and Western Star and an ownership structure that allows these businesses to continue to grow.”

According to a report by the cooperative, it considers both a trade sale and an IPO as viable divestment options. 

The strategic evaluation will allow Fonterra to assess potential value and terms before presenting a final proposal for a shareholder vote. The cooperative intends to engage with potential buyers in the coming weeks while preparing for a possible public listing under the newly designated Mainland Group. 

This brand is recognised in key international markets and reflects New Zealand’s dairy heritage.

René Dedoncker has been appointed as CEO-elect of Mainland Group. 

Dedoncker, who has been with Fonterra since 2005, has led several strategic initiatives, including forming Fonterra Oceania.

 Paul Victor has been named CFO-elect, bringing over three decades of experience, most recently as Chief Financial Officer at Incitec Pivot Limited.

A report by Fonterra indicated that the divestment strategy is expected to have significant implications for the global dairy industry. 

The cooperative aims to maximise shareholder value, strengthen its competitive position in foodservice and ingredients, and expand international market channels for New Zealand dairy products.

As the process moves forward, the outcome could reshape the competitive landscape of the dairy sector. 

Hurrell added, “We want to ensure the best possible future for these businesses and for the farmers who have built them over generations.” 

Once the divestment is complete, the cooperative has reiterated its commitment to delivering a substantial capital return to its farmer shareholders and unit holders.