Fonterra claws back RD1
The $741m revenue rural supplies chain returns to the co-op's control.
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Fonterra has acquired 100% of rural supplies chain RD1.
The co-op sold a 50% stake in RD1 in 2006 to Australian rural supplies chain Landmark, owned by AWB.
As part of that agreement Fonterra had a pre-emptive right to buy back the shares if Landmark or AWB were sold. That opportunity arose in December last year, when Canadian company Agrium bought AWB.
Fonterra chief executive Andrew Ferrier said the co-op was excited at the prospect of RD1 rejoining the fold.
“Since 2006, RD1 revenues have increased from $394 million to $741 million, producing great returns for both Fonterra and Landmark,” Mr Ferrier said.
“RD1 is a solidly performing company with strong farming roots and it’s great to have it back in the family.”
Mr Ferrier said over the next three months Fonterra would review the business and analyse the opportunities before announcing initiatives to better leverage RD1 for shareholders.
With full control of the nationwide chain of 57 stores Fonterra could do much more with the company to deliver value to its shareholders,” Mr Ferrier said.
The timing of the buy-out could not be better, he said, with both Fonterra and RD1 about to conclude extremely good financial years.
“Further, we see many future advantages for Fonterra’s farmer shareholders using a dairy focused store they own and where all the profits come back to them,” Mr Ferrier said.
Due to rules in the original shareholders’ agreement with Landmark, the purchase price cannot be disclosed.
RD1 was formed in 2002 with the consolidation of the trading store networks of both the New Zealand Dairy Group and Kiwi Co-operative Dairies Ltd.
Colin Williscroft
Fri, 01 Jul 2011
Fri, 01 Jul 2011
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Fonterra claws back RD1
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