What Would Synlait Be Worth to Fonterra or a2 Milk?
Speculation of a possible joint move by Fonterra and a2 Milk to buy Synlait raises a much bigger strategic question, says agribusiness expert Dr Nic Lees.
The co-operative has announced that it intends to pay out 100% of underlying earnings generated by Mainland Group during the 2026 financial year while still under Fonterra ownership.
The special Mainland dividend is likely to be in the range of 14-18c/share.
This comes on top of the $2/share capital return to shareholders and unit holders planned for early April from the sale of Mainland Group to Lactalis.
The sale is expected to clear regulatory hurdles by the end of next month. Lactalis is paying $4.22 billion for Fonterra’s consumer and related businesses in Oceania and around the world. The renamed Mainland Group includes iconic brands like Anchor, Mainland, Kapiti, Perfect Italiano and Western Star.
Fonterra chief executive Miles Hurrell says the special Mainland earnings dividend payment will follow the completion of the sale to Lactalis.
“We are currently finalising our interim accounts and can indicate that we expect the special Mainland dividend to be in the range of 14-18 cents per share, which reflects the operating performance of the Mainland business during the first half of this year driven by ongoing cost management and favourable input commodity prices,” Hurrell says.
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“This remains subject to the settlement date of the transaction and the finalisation of our financial statements and audit process.”
Fonterra’s FY26 forecast earnings guidance from continuing operations remains unchanged at 45-65c/share.
It is intended that Fonterra’s dividend policy will be applied to these continuing earnings.
“Our interim dividend from continuing operations will be confirmed when we release our FY26 interim results and an update on the special Mainland dividend will be given at this time,” says Hurrell.
