Lactalis will acquire Fonterra for $3.4 billion, making it the largest dairy company in Australia, pending regulatory and farmer approvals.

Target Information

Lactalis has announced its plan to acquire the Fonterra Cooperative Group for $3.4 billion, a strategic move that will position Lactalis as the largest dairy company in Australia. This acquisition encompasses Fonterra's global operations, including its businesses spread across Australia, Oceania, Sri Lanka, and the Middle East. Fonterra is recognized for its reputable brands such as Western Star butter, Perfect Italiano, and Mainland cheeses. The managing director of Fonterra's global consumer business, René Dedoncker, emphasized the inherent value of Fonterra's assets, including both the factories and the farmers supplying them with milk, which is critical to the operation.

Lactalis, already the world's largest dairy company, seeks to leverage the strengths of Fonterra to enhance its growth trajectory across key markets. Emmanuel Besnier, the CEO of Lactalis, stated that this acquisition would significantly bolster their strategy in regions like Oceania, Southeast Asia, and the Middle East.

Industry Overview in Australia

The Australian dairy industry has faced considerable challenges in recent years, marked by fluctuating milk prices and increasing competition from both local and international players. Dairy farmers often express concern regarding market stab