Sale of consumer and associated businesses

• Fonterra has agreed to sell its Consumer and associated businesses to Lactalis for $4.220 billion NZD.
• Sale is subject to certain conditions, including Fonterra farmer shareholder approval, separation of the businesses and receipt of regulatory approvals. 
• Farmer shareholder vote to occur in late October or early November with Notice of Meeting to be issued in October.
• Fonterra is targeting a tax free capital return of $2 dollars per share. 
• Sale includes long-term agreement for Fonterra to sell milk and ingredients to Lactalis.
• Subject to the satisfaction of conditions, the sale is expected to complete in the first half of 2026. 
• Fonterra’s FY25 earnings guidance of 65-75 cents per share remains unchanged.

• Fonterra’s farmers have $50 billion invested in their farms and a further $12 billion invested in Fonterra shares. 
• We’re choosing to focus on our Ingredients and Foodservice businesses, which generate the Farmgate Milk Price and the majority of the Co-op’s earnings. 
• These high performing businesses both have an average Return on Capital (ROC) above 10%. The Consumer business consistently delivers a ROC below 10%. 
• As a more focused Co-op, we can grow further value for farmers as well as New Zealand.

• At the same time, a new owner with the scale required could take the consumer brands to the next level.

• Lactalis is a French family-owned company and is the world’s largest dairy group, operating in over 50 countries and employing more than 85,500 people.
• They have a global portfolio of recognised brands including Président, Galbani, Parmalat, and Leerdammer. 
• Lactalis has the scale required to take Fonterra’s Consumer brands and associated businesses to the next level. 
• Fonterra farmers will continue to benefit from their success, with Lactalis to become one of our most significant Ingredients customers who we’ll work closely with through a long-term strategic partnership. 

• Fonterra has agreed to sell its Consumer and associated businesses to Lactalis for $4.220 billion NZD.
• Sale is subject to Fonterra farmer shareholder approval, separation and regulatory approvals from parties including OIO in NZ and FIRB in Australia. 
• Farmer shareholder vote to occur in late October or early November with Notice of Meeting to be issued in October. 
• Co-op is targeting a tax free capital return of $2 dollars per share, which is approximately $3.2 billion.
• Sale includes long-term agreement for Fonterra to sell milk and ingredients to Lactalis.
• Subject to the satisfaction of conditions, the sale is expected to complete in the first half of 2026. 
• Fonterra’s FY25 earnings guidance of 65-75 cents per share remains unchanged.

• Under the terms of the agreement, Fonterra will continue to supply raw milk, dairy ingredients and products to the divested businesses under long-term supply agreements.
• This means Fonterra’s New Zealand farmers’ milk will still be found in iconic dairy brands including Anchor and Mainland.
• Lactalis will become one our most significant Ingredients customers who we’ll work closely with through a long-term strategic partnership.

•  Fonterra is committed to a significant capital return to shareholders and unitholders following completion of the sale. The Co-op is targeting a tax free capital return of $2 dollars per share, which is approximately $3.2 billion.
• Completion of the capital return would be subject to a separate shareholder vote following completion of the sale and receipt of proceeds in New Zealand. The amount of the capital return would be confirmed ahead of the capital return shareholder vote.

• Farmer shareholder vote to occur at Special Meeting in late October or early November. 
• Notice of Meeting to be issued in October. It will include detail on the financial shape of Fonterra post-divestment.
• Alongside shareholder approval, the divestment is conditional on regulatory approvals being received from parties including OIO in NZ and FIRB in Australia.  
• Subject to receipt of all approvals, and separation of the businesses from Fonterra, the transaction is expected to complete in the first half of the 2026 calendar year. 
• Fonterra and Mainland Group will now move to the next phase of planning and preparation to ensure a considered and seamless separation of our two businesses.
• Fonterra’s Annual Meeting deferred from November 2025 to December 2025.
• Capital return will be subject to separate shareholder vote following completion of the sale. 

• The divestment is conditional on regulatory approvals being received from the Overseas Investment Office in New Zealand, the Foreign Investment Review Board in Australia, as well as relevant competition regulators and foreign direct investment regulators in certain countries including Kuwait, New Caledonia and Saudi Arabia.
• In July 2025, the Australian Competition & Consumer Commission announced it would not oppose the proposed acquisition by Lactalis in Australia.

• Subject to satisfaction of all conditions, the transaction is expected to complete in the first half of the 2026 calendar year.
• After completion, we’ll enter a transition period where we work closely with the buyer to support ongoing operations. During this time, it’s important that Lactalis can continue to pay employees, make and ship product, and access the existing IT systems.

• Fonterra’s global Consumer business has grown over the years since Fonterra was formed and includes a portfolio of brands such as Anchor, Mainland, Kāpiti, Anlene, Anmum, Fernleaf, Western Star, Perfect Italiano and others. These brands have a presence both in New Zealand and across the world.
• Fonterra Oceania saw the recent coming together of Fonterra Brands New Zealand (which is predominately a Consumer business with a Foodservice element), and Fonterra Australia (which is an integrated Ingredients, Foodservice and Consumer business and sources milk from Australian farmers).
• Fonterra Sri Lanka comprises Consumer and Foodservice businesses.
• The Middle East Africa Consumer and Foodservice businesses includes the Dammam manufacturing facility in Saudi Arabia. 

• Approximately ~4,300 employees work across our global Consumer and associated businesses. 
• These employees are based across a range of geographical areas, including Australia, New Zealand, Sri Lanka, Indonesia, Malaysia, UAE, Saudi Arabia and other markets.  

There are 18 Fonterra owned/operated manufacturing sites globally that are within scope of a potential divestment, as outlined below. 

Fonterra Oceania: 

• New Zealand (x 3): Takaanini (Auckland), Bridge Street (Eltham) and Makomako Rd (Palmerston North) 
• All Australia sites (Cobden, Stanhope, Darnum, Spreyton, Wynyard, Bayswater, Campbellfield, Tullamarine 1, Tullamarine 2) 

Sri Lanka:

• Biyagama 

Indonesia:

• Cikarang 

Malaysia:

• Dairymas 
• Susumas

Middle East

• Dammam