Thursday, 23 January 2020 10:26

Fonterra offloads DFE Pharma, bags $550m

Written by  Sudesh Kissun
Fonterra chief financial officer Marc Rivers. Fonterra chief financial officer Marc Rivers.

Fonterra is receiving a $550 million cash boost following the sale of its 50% stake in pharmaceutical maker, DFE Pharma.

And the co-op is signalling more “one-off” transactions this year as it grapples to strengthen its balance sheet following two straight years of net losses.

The DFE Pharma sale, first announced in September 2019, has completed regulatory approvals from competition authorities.

Fonterra chief financial officer Marc Rivers says the completion of this sale is a key milestone in strengthening the co-op’s balance sheet, with cash proceeds of $554 million, comprising of the original sale proceeds of $537 million plus $17 million in settlement adjustments.

Over the course of the 2020 financial year Fonterra expects there to be other one-off transactions as it implements strategy and continues its asset portfolio review, he adds.

Rivers says it’s too early to comment on the impact of asset sales on the 2020 financial year.

“The announced forecast earnings range will continue to reflect just the underlying performance of the business. 

“We will provide details of the overall impact of all one-offs as part of our full-year financial statements and will also provide an update as part of our Interim Results,” Rivers says.

DFE Pharma was a joint venture established in 2006 between Fonterra and Dutch-based FrieslandCampina. DFE Pharma is one of the largest suppliers of pharmaceutical bulking agents in medicines such as tablets and powder inhalers.

DFE Pharma has production locations in Europe, India and New Zealand (Kapuni). 

More like this

Fonterra vote

OPINION: Voting is underway for Fonterra’s divestment proposal, with shareholders deciding whether or not sell its consumer brands business.

Winston Peters questions Fonterra divestment plan

Foreign Affairs Minister Winston Peters has joined the debate around the proposed sale of Fonterra’s consumer and related businesses, demanding answers from the co-operative around its milk supply deal with the buyer, Lactalis.

Editorial: A new era for two co-ops

OPINION: Farmer shareholders of two of New Zealand's largest co-operatives have an important decision to make this month and what they decide could change the landscape of the dairy and meat sectors in New Zealand.

Featured

Nichol is new PGW chair

A day after the ouster of PGG Wrightson’s chair and his deputy, the listed rural trader’s board has appointed John Nichol as the new independent chair.

Fieldays to rebuild Mystery Creek services building

The iconic services building at National Fieldays' Mystery Creek site will be demolished to make way for a "contemporary replacement that better serves the needs of both the community and event organisers," says board chair Jenni Vernon.

National

Machinery & Products

New McHale terra drive axle option

Well-known for its Fusion baler wrapper combination, Irish manufacturer McHale has launched an interesting option at the recent Irish Ploughing…

Amazone unveils flagship spreader

With the price of fertiliser still significantly higher than 2024, there is an increased onus on ensuring its spread accurately at…

» Latest Print Issues Online

Milking It

Fonterra vote

OPINION: Voting is underway for Fonterra’s divestment proposal, with shareholders deciding whether or not sell its consumer brands business.

Follow the police beat

OPINION: Politicians and Wellington bureaucrats should take a leaf out of the book of Canterbury District Police Commander Superintendent Tony Hill.

» Connect with Dairy News

» eNewsletter

Subscribe to our weekly newsletter