Hurrell Resignation: No Bonus or Golden Handshake for Fonterra CEO
Fonterra is rejecting New Zealand First's claim that outgoing chief executive Miles Hurrell is in line for a 'golden handshake'.
“As the world’s largest dairy company, Lactalis has the scale required to take these brands and 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,” says Hurrell.
“At the same time, a divestment of these businesses will allow Fonterra to deliver further value for farmer shareholders and New Zealand by focusing on our world leading Ingredients and Foodservice businesses, through which we sell innovative products to more than 100 countries around the world, from our home base here in New Zealand,” says Hurrell.
Lactalis CEO Emmanuel Besnier says “with this acquisition, we significantly strengthen our strategy across Oceania, Southeast Asia and the Middle East. Combining the Fonterra consumer business operations and market leading brands with our existing footprint in Australia and Asia will allow Lactalis to further grow its position in key markets.
“I'm delighted to become a key partner to Fonterra over the long term as well as I'm looking forward to welcoming new teams to the Lactalis family".
Under the sale agreement, that needs ratification by Fonterra shareholders and regulatory authorities, Lactalis will pay $3.845 billion for Fonterra’s global consumer business (excluding Greater China) and consumer brands; the integrated foodservice and Ingredients businesses in Oceania and Sri Lanka; and the Middle East and Africa Foodservice business.
There is potential for a further $375 million increase in the sale price from the inclusion of the Bega licences held by Fonterra’s Australian business, which if progressed would take the headline enterprise value of the transaction up to $4.22 billion.
Read More:
- Lactalis to buy Fonterra's consumer business for $3.8b
- A$2B bid for Fonterra Oceania a positive signal
- Lactalis in front to acquire Fonterra's Australian dairy assets after ACCC clearance
The co-op is targeting a tax-free capital return of $2/share to share and unit holders, which is approximately $3.2 billion, following completion of the sale.
The sale also includes long-term agreement for Fonterra to sell milk and ingredients to Lactalis.
Farmer plans to hold a shareholder vote in late October or early November with notice of meeting to be issued in October.
