It is among the biggest deals in New Zealand corporate history, the firm says
Russell McVeagh has guided Fonterra Co-operative Group Limited on the $4.22bn divestment of its global consumer and associated businesses to Lactalis.
Under the deal, Fonterra sells its shares in Mainland Group Holdings Limited. The deal covers the brands Anchor, Bega, Mainland and Kapiti and includes related operations in Oceania, Sri Lanka, Southeast Asia and the Middle East. It also incorporates a long-term agreement in which Fonterra will sell milk and ingredients to the sold businesses now under Lactalis ownership.
“With this acquisition, we significantly strengthen our strategy across Oceania, Southeast Asia and the Middle East. Combining the Fonterra consumer business operations and market leading brands with our existing footprint in Australia and Asia will allow Lactalis to further grow its position in key markets”, Lactalis CEO Emmanuel Besnier said in a Fonterra media release.
Fonterra chairman Peter McBride said the sale decision, which was greenlit by the Australian Competition & Consumer Commission in July, was made following a competitive sale process.
“Following a highly competitive sale process with multiple interested bidders, the Fonterra Board is confident a sale to Lactalis is the highest value option for the Co-op, including over the long-term. Alongside a strong valuation for the businesses being divested, the sale allows for a full divestment of the assets by Fonterra, and a faster return of capital to the Co-op’s owners, when compared with an IPO”, McBride said.
According to Russell McVeagh co-lead partner Ben Paterson, this ranks among the biggest corporate deals in New Zealand.
“This is a landmark transaction for New Zealand’s dairy sector, and one of the largest transactions in New Zealand corporate history. Our firm is immensely proud to have supported Fonterra on this complex, multi-jurisdictional deal as the Co-operative sharpens its focus on its core business and returns capital to its farmer shareholders”, Paterson said.
The acquisition is set for completion in the first half of 2026 pending farmer shareholder and regulatory approvals, including from the Overseas Investment Office in New Zealand, the Foreign Investment Review Board in Australia, and relevant competition regulators and foreign direct investment regulators in countries like Kuwait, New Caledonia and Saudi Arabia. It is also conditional on the separation of the businesses from Fonterra and no material adverse change arising before completion, Fonterra said.
Farmer shareholders are set to vote in late October or early November, according to Fonterra.
Russell McVeagh’s team was Fonterra’s lead deal counsel and tackled all New Zealand legal aspects of the deal. Paterson led the interdisciplinary team alongside fellow corporate advisory partners David Hoare and Hannah Wilson.
They were assisted by partners Liz Blythe, Bradley Aburn, Joe Windmeyer, Fred Ward, Joe Edwards, David Butler, Emma Peterson and Craig Shrive; special counsel Hamish Beckett, Brigette Shone and Sarah McQueen; senior associates Lucy Campbell, Hannah Brown, Rachael O'Malley and Sam Kember; senior solicitors Leisha Fletcher, Niranjanaa Ram and Young-Chan Jung; and solicitors Siena Rapley, Kirsty McCulloch, Julia Fraser, Sophie Brokenshire, Stephanie Wheble, Lucy Adams, Dexter Peffers, Emily Briggs, Ella Lester, Cole Murray, Tayla Fraser-Brown, TK Lo, Lennox Tait, Nicole Simmons, Hannah Clarke, Jessie Williams, Kieran O'Connor, Andrew O'Malley Shand and Angelica Sivananthan.
A team from Herbert Smith Freehills Kramer handled the M&A and capital markets aspects of the dual-track sale and IPO process, Australian regulatory workstreams – including FIRB and ACCC – and the running and settlement of litigation with Bega Cheese Limited. The HSF Kramer team was spearheaded by Nick Baker, Tim McEwen, Linda Evans and Merryn Quayle.
Jarden, Craigs Investment Partners and JP Morgan provided financial advice to Fonterra.
