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The sale of potential Fonterra target Australian dairy firm Dairy Farmers has taken a step forward with the co-operative starting to formally evaluate interest.
The co-op, which is owned by 2000 farmers and processes one billion litres of milk each year, yesterday said it had started a process to evaluate interest from third parties to acquire, merge or enter into a joint venture.
It did not identify the parties, which are understood to include National Foods, Parmalat and Saputo.
Fonterra had previously been tipped by analysts as being among a pack getting ready to make a move on Dairy Farmers. A Fonterra spokeswoman said the company would not comment on speculation.
"There have been rumours and speculation in the market for some time," she said.
"Fonterra is focused on a range of organic growth opportunities in Australia and we will look at any consolidation opportunities that come up."
Fonterra chief executive Andrew Ferrier has said the company is looking at possible acquisitions in many parts of the world, on condition the financial terms are attractive.
Fonterra had been prepared to pay nearly $2 billion for National Foods in 2005 before eventually being out-gunned by San Miguel.
Dairy Farmers chief executive Rob Gordon said the company had been systematically restructured during the previous four years to prepare it for an external investment opportunity.
Last year the company said it would consider options beyond an ASX-listing, which had been planned for this year.
"Given the high level of interest, the various options that may be put forward and the requirement to obtain necessary regulatory clearances, Dairy Farmers board will be methodical in its assessment of the available options before it decides upon a recommendation to shareholders."
