Synlait denies discussions with A2 Milk & Fonterra over potential transaction

NEW ZEALAND – Synlait Milk, a New Zealand dairy processor, has denied that it is involved in discussions with The A2 Milk Company or Fonterra regarding a potential transaction.

The company issued the statement in response to media reports published on Monday 17 August concerning a possible deal involving third parties.

“Synlait confirms that it is not involved in any discussions with The A2 Milk Company or Fonterra regarding the matters referred to in those reports,” the company said.

The market response follows reporting by The Australian suggesting that a2 Milk—which maintains a 19.8 percent strategic shareholding in Synlait—alongside Fonterra were exploring a potential transaction to privatize and reorganize the processor’s processing infrastructure.

Both a2 Milk and Fonterra declined to comment on market speculation. Addressing broader corporate strategy during its FY26 full-year results presentation, a2MC Chief Executive Officer David Bortolussi reiterated that the infant nutrition company maintains constructive relationships with Synlait and its controlling shareholder, Bright Dairy, while emphasizing a2MC’s strategic focus on scaling its newly acquired Pōkeno manufacturing facility.

The takeover rumors surfaced as Synlait continues to execute a multi-phase corporate recovery roadmap designed to stabilize operations, restore manufacturing quality benchmarks, and de-lever its balance sheet.

The processor has navigated an intense operational period marked by debt burdens, leadership turnover—including the departure of Chief Executive Richard Wyeth earlier this year and the appointment of director Leon Fung as acting CEO—and strategic divestments of non-core North Island assets to simplify processing throughput.

The news comes after Synlait finalised a new bank financing arrangement totalling US$ 180.8 million (NZ$320 million) following discussions with new and existing lenders.

In an announcement on NZX, the company said its new bank funding syndicate will be made up of ANZ Bank, China Construction Bank, Bank of China, Shanghai Rural Commercial Bank, HSBC, China Merchants Bank, Bank of Communications, Industrial Commercial Bank of China and Bank of Beijing. 

The new bank funding arrangements include a US$8.5 million (NZ$15 million) overdraft, US$82.4 million (NZ$146 million) in working capital, a US$ 67.2 million (NZ$119 million) secured term loan, US$8.4 million (NZ$15 million) in revolving credit, and an additional US$14.1million (NZ$25 million) secured term loan.

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