Fonterra and Nestlé Complete DPA Brazil Sale

Fonterra and Nestlé Complete DPA Brazil Sale
Photo: 09.11.2023 758

The deal was announced in December last year, but the parties had to obtain permission from the antimonopoly regulator. The approval has now been received, a Fonterra representative said.

The sale of Fonterra and Nestlé’s Dairy Partners Americas (DPA) Brazil joint venture (JV) to French dairy company Lactalis is complete. The JV was sold for BRL 700 million (approx. $133 million).

These proceeds offset debt related to that business, which means there will be little cash impact on Fonterra’s earnings.

The DPA Brazil joint venture was owned 51% by Fonterra and 49% by Nestlé.

According to Fonterra CEO Miles Hurrell, the company will focus on its New Zealand milk pool.

DPA operates two plants located in Araras, Sao Paulo, and Garanhuns in Pernambuco state, employing 1,300 people, all of whom will be retained by Lactalis. It supplies dairy products, including milk-based beverages and yogurts, under the Nestlé brand and also Chamyto, Ninho, Chandelle, Chambinho, Neston and Molico.

Earlier, the media reported that the Brazilian Administrative Council for Economic Defense (CADE) advised the regulator to block the sale of the joint-venture assets in the country owned by Fonterra and Nestlé to Lactalis. According to CADE, the sale of Dairy Partners Americas (DPA) would lead to horizontal competition issues in Brazil’s dairy chilled products markets, specifically fermented milk, petit suisse and dairy desserts.

France-based Lactalis, the world's largest dairy producer, already owns 13 brands in Brazil, including Parmalat, Batavo, Itambe and Pocos de Caldas brands. 

Lactalis dominates the market in Brazil for dairy and soy-based products, followed by Nestlé and French peer Danone, according to research firm GlobalData.


food markets  Brazil 

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