Fonterra sells AFF stake to ARLA

Fonterra has sold its 25% interest in UK joint venture AFF to majority owner Arla Foods amba. of Denmark.

Fonterra Chief Financial Officer Jonathan Mason said the joint venture had been successful. However, Fonterra had determined the investment was no longer core to the long term strategy, which is focused on growing value add ingredients sales and on regional consumer businesses in Asia/AME, Australia and New Zealand, and Latin America.

Mr Mason said Fonterra would continue to license the ANCHOR brand to Arla and to supply New Zealand butter to generate returns for Fonterra’s farmer shareholders.

AFF was established in 2002 to market block butter, spreads and aerosol cream products in the UK.

The transaction value was not disclosed. Mr Mason said the sale of the stake in AFF would have a positive balance sheet impact for Fonterra.