Fonterra announces divestment of Chile business

18 November 2022

Fonterra announces divestment of Chile business
Fonterra is pleased to announce the divestment of its Chilean Soprole business. The divestment
comprises a number of transactions that result in aggregate consideration of 591.07 billion Chilean Pesos
(approximately NZD1.055 billion).

Fonterra CEO, Miles Hurrell, says that the divestment process for the Soprole business formally
commenced in April 2022, following the launch of Fonterra’s strategy to 2030.

“A key pillar of our strategy is to focus on New Zealand milk. Soprole is a very good business but does not
rely on New Zealand milk or expertise. We are now at the end of the divestment process and have agreed
to sell Soprole to Gloria Foods - JORB S.A. (Gloria Foods).”

Gloria Foods is a consumer dairy market leader in Peru, with operations in Bolivia, Puerto Rico,
Argentina, Colombia and Uruguay. Fonterra and Gloria Foods have a long-standing commercial
relationship in South America.

The divestment comprises the sale of shares in a Fonterra owned holding company. Proceeds received
by Fonterra at completion from the sale of shares will be subject to relevant adjustments including capital
gains tax, working capital and net debt adjustments at closing, foreign exchange hedging costs, and other
transaction related costs. The aggregate consideration also includes the receipt by Fonterra, prior to
completion, of dividends from Soprole and intercompany debt owing to Fonterra, which will be repaid at
completion.

The divestment is subject to a number of conditions. The material conditions are receipt of regulatory
approvals (including from the competition authority in Chile) and commencement of an irrevocable public
tender offer process in Chile for the outstanding shares in Soprole not already owned by Fonterra.
Satisfaction of conditions is expected to take approximately six months.

Mr Hurrell says that Fonterra has a long history in Chile and is pleased to have reached agreement with
Gloria Foods, which also has a proud dairy history in South America. Fonterra is delighted to pass on the
Soprole business to a committed new owner with a strong regional focus on growth. Soprole’s success
over many years and its market-leading position across a number of dairy categories in Chile, has been
built on the dedicated focus of Soprole’s management team and staff, and the support of its supplying
farmers.

Fonterra remains committed to targeting a significant capital return to our shareholders and unitholders.
The Fonterra Board intends to make a final decision on the amount and timing of any capital return once
the sale agreement is unconditional, cash proceeds are received in New Zealand and having regard to
other relevant factors including Fonterra’s debt and earnings outlook at such time.

Fonterra Co-operative Group
Page 2

Fonterra’s previously announced FY23 earnings guidance will continue to reflect only the underlying
performance of the Soprole business during the pre-completion period. Fonterra will provide an update on
the overall impact of its divestment programme as part of its FY23 financial reporting.

Note: Assumed CLP to NZD foreign exchange rate of 560.


ENDS

For further information contact:

Fonterra Communications
24-hour media line
Phone: +64 21 507 072