Fonterra has sold its Chile dairy assets to Peru’s Gloria Foods for CLP591.07bn (US$641m).
The group, owned by 10,000 New Zealand farmers, said it wants to focus on its domestic production.
Fonterra said Soprole, its Chilean arm, “is a very good business but does not rely on New Zealand milk or expertise”.
Soprole’s portfolio of dairy products includes liquid milk, desserts, yogurt and cheese. It also sells fruit juice. Just Food has asked Fonterra for further details on Soprole’s manufacturing sites and the number of staff it employs.
Gloria Foods has operations in Bolivia, Puerto Rico, Argentina, Colombia and Uruguay. The two dairy businesses have “a long-standing commercial relationship in South America”, Fonterra said.
As well as dairy products, Gloria Foods produces plant-based milk, jam, cake, canned fish and soft drinks brands.
The sale of Soprole comes after Fonterra backtracked on the sale of its Australian arm in September, saying business was “going well” in the country.
Fonterra CEO Miles Hurrell said: “A key pillar of our strategy is to focus on New Zealand milk. Soprole is a very good business but does not rely on New Zealand milk or expertise. We are now at the end of the divestment process and have agreed to sell Soprole to Gloria Foods.”
The world’s largest dairy exporter first announced plans to divest its Australia and Chile businesses last year as it set out its 2030 strategy to focus on value-added opportunities in New Zealand milk.
Dairy peer Saputo was recently speculated to be a potential buyer for Fonterra’s assets in Chile.
Last year, Fonterra exited joint-venture farms in China and sold assets in the Asian country.
The New Zealand Dairy Board, now Fonterra, first bought a stake in Soprole in the 1980s. It increased its share to 99.45% of the company in 2008. It paid US$201.9m for an additional 42.6% stake.
The deal, formally begun in April, is expected to take six months to complete.