BRAZIL – Lactalis, one of the world’s largest multinational manufacturers of dairy products, is strengthening its presence in Brazil through the acquisition of Dairy Partners America (DPA).
The acquisition is for BRL700M (US$131.5M) and will be effective mid-2023 subject to the appropriate regulatory authorities’ approval.
Established in 2003, DPA is a brazil-based manufacturer and marketer of dairy products formerly co-owned by New Zealand dairy cooperative Fonterra (51%) and Switzerland-based food company Nestlé (49%).
Set to become part of Lactalis, DPA operates in two plants that market and supply brands such as Chambinho, Nestlé, and Chamyto and employs 1300 people.
All of DPA’S operations including its factories, distribution centres and employees will be absorbed by Lactalis together with the long-term rights to use Nestlés trademarks of Ninho, Neston and Molino as per the terms of the transaction.
The managing director of Lactalis’ brazil business Patrick Sauvageot reported in a statement, “The acquisition of DPA brings complementarity to our portfolio of brands and of products and will allow us to develop our commercial and geographic coverage.”
“By thus consolidating its position as a responsible leader in dairy products in Brazil, Lactalis do Brasil is determined to pursue the process of continuous improvement of all of the local production chain.” He finished.
Fonterra CEO, Miles Hurrel said in a statement that the sale of DPA has lined up with their strategy of focusing on their local New Zealand milk production pool.
He said, “DPA Brazil has reached maturity as an investment for us, and the sale allows us to prioritise our resources to the businesses that are core to our strategy.”
Fonterra and Nestlé had begun reviewing the strategic options for the future ownership of DPA in May 2019 and it had been held for sale in Fonterra’s financial statements since January 2020. The proceedings were delayed due to the 2020 coronavirus pandemic.
The latest sale of DPA assets to Lactalis is subsequent to other recent developments such as the sale of Fonterro’s Chile-based dairy operation Soprole to Peru’s Gloria Foods and other Fonterra – Nestlé dairy collaborations.
In September, Fonterra also pulled out on a plan to sell its Australian assets, with Hurrell saying “the business is going well” and that it was a key asset to the company reaching its 2030 targets.
Lactalis first started business in brazil in 2013 and today dominates the brazilin market for dairy and soy products followed by peers Nestlé and Danone, according to research firm Global Data.
They market brands such as Itambe which holds a 3.4% share value and elege which owns 3% according to Just Foods.
Other brands marketed in brazil include Parmalat, Batavo, President, Cotochés, and Poços de Cladas making the company the largest milk collection business in Brazil operating 23 manufacturing sites in 8 states.