Fonterra farmers approve divestment capital return scheme 

NEW ZEALAND – Fonterra has announced that its farmer shareholders have approved the scheme of arrangement for the capital return that’s expected from the sale of its global Consumer and associated businesses.

The co-operative can now seek final Court approval to undertake the capital return of $2.00 per share to shareholders and unit holders, subject to the divestment of Mainland Group to Lactalis being completed.

It expects the transaction to be complete in the first quarter of the 2026 calendar year, subject to separation of the businesses from Fonterra and provided the remaining regulatory approvals are received within the expected timeframes.

Once these steps have been completed, the co-operative will confirm the record date for the capital return, which will be within the five business days prior to the capital return payment being made to shareholders and unit holders. 

Concurrently, the co-operative announced it has lifted its forecast Farmgate Milk Price for the 2025/26 season and narrowed its forecast range.

The midpoint has increased from $9.00 per kgMS to $9.50 per kgMS, with the forecast range lifting and narrowing from $8.50-$9.50 per kgMS to $9.20-$9.80 per kgMS.

CEO Miles Hurrell says the Co-op has been able to make these changes based on recent improvements in global commodity prices combined with Fonterra’s well contracted sales book. 

“As we have seen, global dairy prices have been volatile across the season. Following the declines at the end of 2025, prices have lifted in the last four Global Dairy Trade events.

“Global milk production remains above seasonal norms, meaning the risk of further volatility in pricing remains. As such, we continue to take a balanced approach with our Farmgate Milk Price forecast,” he said.

Additionally, the co-operative intends to pay out 100% of underlying earnings generated by Mainland Group during FY26 while still under Fonterra ownership.

The earnings will be distributed through a special Mainland dividend payment to shareholders and unit holders following the completion of the sale to Lactalis.

“We are currently finalising our interim accounts and can indicate that we expect the special Mainland dividend to be in the range of 14-18 cents per share, which reflects the operating performance of the Mainland business during the first half of this year driven by ongoing cost management and favourable input commodity prices,” it stated.

As previously indicated, Fonterra expects the transaction to be complete in the first quarter of the 2026 calendar year, subject to separation of the businesses from Fonterra and remaining regulatory approvals being received.  

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