Fonterra Eyes Joint Bid for Aussie Co-Op

NEW ZEALAND dairy co-operative Fonterra and National Foods are working together on a possible joint bid for Australia’s Dairy Farmers, the dairy producer said.

Dairy Farmers said it had waived confidentiality agreements to allow Fonterra and dairy and juice producer National Foods, which is owned by Japan’s Kirin Holdings, to work together on a National Foods-led bid.

Dairy Farmers, which is owned by some 2000 Australian farmers and makes Dairy Farmers brand milk, Coon cheese and Ski yoghurt, put itself up for sale in April.

Analysts estimate a deal could be worth between $A800 million ($NZ1 billion) and $A1 billion.

Dairy Farmers chief executive Rob Gordon said the talks between Fonterra and National Foods reflected the high level of interest in the dairy producer.

“As we move through this (sale) process, major local and international dairy players are taking positions and joining forces to increase their capacity to secure Dairy Farmers’ assets and brands,” Gordon said.

A source last week said the two firms had held talks about the bid.

Fonterra and National Foods, with its venture partner Warrnambool Cheese and Butter Ltd, have already lodged separate, individual bids for Dairy Farmers.

Italy’s Parmalat has also lodged a bid, and all three have sought regulatory clearance for a deal.

The competition regulator is due to make its first ruling, on the National Foods and Warrnambool bid, this week. It will rule on the other bidders in coming weeks.

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