Fonterra, Foodstuffs Agree on Sale of Kapiti Foods
15 November 2005
Fonterra and Foodstuffs Reach Agreement on Sale of Kapiti Fine Foods
Fonterra and Foodstuffs Wellington announced today that they have signed a Heads of Agreement for the sale of Kapiti Fine Foods.
The agreement is subject to approval from the New Zealand Commerce Commission (NZCC) and completion of the formal due diligence process.
“The acquisition of Kapiti Fine Foods will further support Fonterra Brands’“Winning through Brands” strategy which focuses on strong brands that deliver faster growth and better margins,” said Fonterra Brands Managing Director Sanjay Khosla.
“Under the proposed agreement Fonterra Brands will acquire a range of assets including production sites at Palmerston North and Paraparaumu. Fonterra Brands will also acquire the rights to supply the Pam’s milk and cream brand in the lower-North Island. The Kapiti branded cheese and ice cream will provide a strong high-value brand in specialty segments,” Mr Khosla said.
Foodstuffs Wellington Chairman Brian Drake said Kapiti Fine Foods Limited had been a very good investment, and the Group had developed the business to the maximum of its natural boundaries.
“Foodstuffs Wellington has taken the business as far as it can, developing the brand and manufacturing capabilities. The new structure would give the business renewed impetus and opportunities, and, of course, it would remain in New Zealand ownership.
“Foodstuffs has been absolutely delighted with the development of Kapiti Fine Foods, and the progress and growth it has achieved.”
Both organisations stressed that at this stage it’s business as usual and too early to speculate on the outcome of the NZCC application and due diligence processes, which are expected to conclude in the first quarter of next year.