May 1, 2008

Fonterra increases stake in Chilean dairy company

New Zealand's dairy co-operative Fonterra will own almost all of the Chilean dairy company Soprole after agreeing to buy another 42.6 percent of its shares.

Fonterra, which already owns more than 56 percent of Soprole, will buy the shares held by Fundacion Isabel Aninat, a charitable foundation controlled by the Vatican.

The US$202 million deal has received final approval from the Vatican.

Fonterra chief executive officer Andrew Ferrier says Soprole has been a strong performer for Fonterra in the rapidly expanding South American dairy market.

More than 40 percent of the company's sales have been from products introduced to the market in the past three years, he said.

Soprole's profit last year rose 160 percent to a record 24 billion Chilean pesos, or more than NZ$66 million (US$51.6 million). On average it has provided returns NZ$ 25 million (US$19.5 million) a year to Fonterra shareholders in the past few years.