French dairy company Sodiaal sells German cheese business to Meggle, Fonterra completes sale of two China farms

GERMANY – French dairy company Sodiaal has sold German cheese company Stegmann Emmentaler Käsereien GmbH to Meggle Group GmbH.

The acquisition comes just a month after the French dairy company bought a 51% controlling interest in Yoplait S.A.S. from General Mills

In exchange for the 51% stake it gave to Sodiaal, General Mills got a full ownership of the Canadian Yoplait business and a reduced royalty rate for use of the Yoplait and Liberté brands in the US and Canada.

In a statement, Meggle said the acquisition of Stegmann sustainably strengthens its cheese product segment.

“With Meggle and Stegmann, two Bavarian companies with a long and successful history are coming together. We will bundle our competencies, make investments and use the great potential,” Matthias Oettel, CEO of Meggle Group said.

Stegmann currently employs around 200 people at its sites in Kempten and Altusried and had a turnover of around €120m (US$141m) in 2020.

Fonterra completes sale of 2 China farms

Meanwhile, Sodiaal’s European competitor Fonterra has completed the sale of its two wholly-owned China farming hubs in Ying and Yutian.

Fonterra first announced its intention to sale the Chinese farms in October 2020 and has since received anti-trust clearance and other regulatory approvals in China, allowing for completion of the sale.

The transaction proceeds comprise the original sale price of NZ$513m (US$357m) plus NZ$39m (US$27m) in settlement adjustments, giving cash proceeds of NZ$552m (US$385m).

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Fonterra CEO Miles Hurrell said the sale of the farms will allow the company to prioritise its business areas where it has competitive advantages after an 18-month review of the company’s strategic outlook.

“Fonterra has contributed to the development of the Chinese dairy industry by establishing these farms and we’re pleased to now hand ownership over to Youran for the next phase of development,” Hurrell said.

“The China market is fast-moving and inspires us to keep innovating. Our China team will now continue with their focus on creating value from our New Zealand farmers’ milk through new products, applications, and close partnerships with our customers.”

The completion of the sale of Fonterra’s 85% interest in its Hangu farm to minority shareholder Beijing Sanyuan Venture Capital Co., Ltd., as announced in October 2020, is progressing and is expected to be completed this financial year.

Fonterra expects to use the cash proceeds from the two transactions to pay down debt, as part of its previously announced overall debt reduction program.

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