Good Luck to Fonterra

Thursday, 28 October 2004, 5:30 pm
Press Release: Federated Farmers

28 October 2004

Fonterra Co-operative Group's bold decision to mount a takeover bid for Australia's National Foods is a positive move which should succeed, said Kevin Wooding, Chairman of Dairy Farmers of New Zealand (DFNZ).

"The $A5.45 a share bid appears to be a very attractive price and I would be surprised if shareholders did not accept," Mr Wooding said.

"There are lots of good reasons for Fonterra to take over National Foods, Australia's largest publicly owned dairy company.

"National Foods has milk, dairy foods and specialty cheese markets, and has leading brands and market shares in all sectors.

"Buying National Foods will allow Fonterra to enter the national market for milk and cultured foods such as yoghurt. And the purchase will complement Fonterra's strength in the national cheese and spreads markets.

"The acquisition will also help build a stronger platform for growing export revenues to Asia and ultimately greater returns to New Zealand farmers," Mr Wooding said.

"The takeover decision is a commercial matter for Fonterra's board and management. DFNZ was not consulted before the bid, and neither should it. But Fonterra should be reminded that there are large amounts of money at stake, and at the end of the day there has to be a dollar in it for Fonterra's owners," Mr Wooding said.

Fonterra is owned by about 12,000 farmer suppliers, most of which are members of DFNZ, an industry group of Federated Farmers of New Zealand (Inc).

ENDS

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