By Stephen Wright
WELLINGTON, New Zealand – Fonterra Cooperative Group Ltd. announced it would sell stakes in its dairy auction system to the European Energy Exchange and New Zealand stock market operator as part of efforts to increase volumes and improve price discovery.
Each owner will hold a one-third stake in Global Dairy Trade, which was established by New Zealand-based Fonterra in 2008.
About $2-3 billion worth of commodities such as whole milk powder, butter, and cheese are traded annually on GDT by buyers and sellers from about 70 countries.
“Dairy products are one of the most volatile products,” Fonterra said in a statement Thursday. “This partnership is another step to help manage that risk for everyone, from farmer to customer,” he said.
Financial terms were not disclosed. NZX Ltd., the New Zealand stock market operator, said it would raise around NZ$44 million ($29.4 million) by issuing new shares to fund its investment in the dairy trading system and for other business plans.
Subject to regulatory clearances, the deal could close by mid-2022.
Write to Stephen Wright at [email protected]