Fonterra, CIC eye VDL: report

Chinese investment fund part of proposal to buy Aust dairy producer.

New Zealand dairy giant Fonterra (FSF) and the state-owned China Investment Corporation (CIC) have proposed to buy Australia's oldest dairy producer, Tasmania-based Van Diemen's Land (VDL), according to The Australian.

The proposed deal could see CIC emerge with nearly half of VDL as part of a $200 million deal that could join ADM's $3 billion bid for GrainCorp (GNC) as an early test of the incoming coalition government's approach to foreign investment.

VDL is currently owned by the investment management arm of the New Plymouth District Council in New Zealand and had been widely flagged as being for sale, with CIC identified as an interested potential buyer.

VDL is already a supplier for Fonterra and late last year Fonterra was rumoured to have held talks with CIC about investment opportunities.

As part of the proposed deal, VDL would partner with Fonterra to buy half of the VDL business.

The Australian reported that VDL chief executive Michael Guerin declined to comment on the speculation, as did Fonterra.

Want access to our latest research and new buy ideas?

Start a free 15 day trial and gain access to our research, recommendations and market-beating model portfolios.

Sign up for free

Related Articles