By Rebecca Howard
June 28 (BusinessDesk) - Fonterra Cooperative Group has sold its stake in Germany-based Goodminton AG, the parent of active nutrition start-up foodspring, and will realise a $64 million gain on the sale.
Fonterra teamed up with foodspring in March last year to tap into the $200 billion 'active' consumer segment. At the time, Judith Swales, then Fonterra’s chief operating officer, velocity and innovation, said the deal would create "a range of exciting new business and market development opportunities for the co-operative."
Since then, however, Fonterra has embarked on a strategic review that includes divesting a range of assets no longer deemed central to its future, such as the recent $380 million sale of the Tip Top ice-cream business. It is currently reviewing its two wholly-owned farm-hubs in China and considering options for the future ownership of its Dairy Partners Americas Brazil joint venture, including a potential sale of respective stakes.
Fonterra’s chief operating officer NZMP, Kelvin Wickham, says the partnership with foodspring was an exciting early activity for Fonterra’s sports and active lifestyle business unit.
"The partnership gave us immediate and direct access to the fast-growing consumer sports and active lifestyle segment. This is not just about professional athletes or bodybuilders anymore. Today it’s about everyday people taking more interest in their health and wellbeing, living longer and leading more active and healthier lives," he said.
The sale of its stake in Goodminton comes as Mars inked a deal to purchase a majority shareholding in foodspring.
“This continues to be a really attractive market for our dairy protein and dairy specialty ingredients and we will keep up the momentum in this market. We are excited about continuing our relationship with foodspring and its new owners Mars, who will remain a valued customer of our NZMP ingredients business,” said Wickham.
The transaction is subject to regulatory approvals from competition authorities.
The gain on sale is subject to customary purchase price adjustments, exchange rate movements and final audit. It is not yet clear when the transaction will close and whether it will have an impact on current year earnings, Fonterra said.