New Zealand’s dairy exporter Fonterra Co-operative Group (FCG.NZ) said on Friday that it was selling its dairy operations in Chile to Peruvian firm Gloria Foods in multiple transactions worth about 591.07 billion Chilean pesos ($641.42 million).
The divestment is part of Fonterra’s renewed focus on bolstering its operations in New Zealand as it phases out its overseas milk pools, while reducing debt.
The process to hive off its Chilean operations, Soprole, began in April this year and will be conducted through “a number of transactions” involving sale of shares in a Fonterra holding company, the dairy exporter said.
“Soprole is a very good business but does not rely on New Zealand milk or expertise,” Fonterra Chief Executive Officer Miles Hurrell said in a statement.
“We are now at the end of the divestment process and have agreed to sell Soprole to Gloria Foods – JORB S.A. (Gloria Foods).”
Gloria confirmed the deal in a statement to Peru’s securities regulator. The company said the transaction would involve $210 million in cash as well as an undisclosed amount of debt payments.
The deal is subject to regulatory approvals and commencement of a tender process in Chile for the outstanding shares in Soprole not already owned by Fonterra.
($1 = 921.5000 Chilean pesos)