November 19, 2015

Dairy Farmers of America (DFA) will acquire the remaining 50% stake in it’s DairiConcepts joint venture from Fonterra for NZ$196 million (US$128 million). Formed by the two groups in 2000, DairiConcepts produces cheese, dairy ingredients, and dairy flavor systems at its eight production sites in Minnesota, South Dakota, Wisconsin, Pennsylvania, Missouri, and Iowa.

Commenting on the decision to sell, Fonterra chief executive, Theo Spierings, said that the DairiConcepts joint venture had grown to be a “non-core component of its strategy”, reports DairyReporter. But Mr. Spierings adds that the U.S. is still a key regional hub for the group, and despite the divestment, Fonterra will continue to pursue new opportunities in the market.

Following the divestment, Fonterra plans to continue its strong relationship with DFA, which is owned by more than 14,000 dairy farmers across 48 U.S. states, having reached a ‘long-term supply agreement’ as part of the sale agreement between the two companies, according to DairyReporter.