Fonterra’s farmer shareholders have given the go ahead for the co-op to sell its global consumer and associated businesses.

Fonterra's Mainland Group will be sold to French dairy giant Lactalis for NZ$4.22 billion, with 88.47% of the total farmer votes cast in support of the divestment.

The final votes on the deal were cast at a virtual special meeting held this morning, October 30.

Engagement from farmers

Chairman Peter McBride said the board and management team were "encouraged by the level of engagement" from farmer shareholders in the lead up to the vote.

“We’ve been pleased to see so many farmers joining in the discussions since the start of this process in May last year when we first announced the decision to explore divestment options, and especially over the past month or so when the full details have been available," he said.

"We’re pleased to have received a strong mandate, with 88.47% of the total farmer votes cast in support of the recommendation and 80.59% participation based on milk solids voted."

McBride said the decision to divest the Mainland Group businesses is "significant, and one the board did not take lightly".

“We have examined the strategic context we operate in, our strengths and how as a co-op we create value for our farmer owners," he said.

"We will have a simplified and more focused business, the value of which cannot be overstated."

The threshold required to approve the sale was for more than 50% of the votes from those entitled to vote and who actually voted to be in favour of the proposal.

Next steps in Fonterra sale

Completion of the divestment remains subject to securing certain regulatory approvals and the separation of the Mainland Group business from Fonterra, both of which are underway.

Subject to these steps being completed, Fonterra expects the transaction to complete in the first half of the 2026 calendar year.

Fonterra is targeting a tax-free capital return of $2 per share to shareholders and unit holders, equivalent to $3.2 billion, once the sale is complete.

Another shareholder vote will be required for the payment of the capital return.

The co-op plans to provide more detail on the timing and process for the capital return in early December, it said.