Transtasman food giant Goodman Fielder is finally selling off its edible fats and oils operation on both sides of the Tasman for $A240 million, but will hold on to its New Zealand flour milling operations.
The business, which processes edible fats and oils and supplies food manufacturers and wholesalers in Australia and New Zealand, has been sold to international food company Cargill.
Goodman Fielder announced plans to sell the business earlier this year and revealed it was negotiating with potential buyers in October.
While the fats and oils businesses was said to be worth between $A250 and $A400 million, the final sale price came in under that, although managing director Peter Margin said it was still a “significant premium to the carrying value of the business”.
The sale includes the commercial business’s four fats and oils refining facilities, although it will retain title to the land at the Brisbane facility, subject to an extended lease back to Cargill.
The company made a point of noting its New Zealand flour milling operations were not part of the sale, while it will also hold on to the part of its food service operations that does not relate to fats and oils.
The sale is a result of the company’s current focus on its consumer brands, according to Mr Margin.
“As a consequence of our strategic decision earlier this year to focus on our consumer brand portfolio, we decided that, as a commercial industrial business, it did not fit comfortably with our major strategic focus, and that therefore the funds employed in this business would be better utilised elsewhere.”
The sale still needs to be approved by competition regulators before being finalised.