DJ NZ Fonterra Buys Nestle's Australian Yogurt Business

WELLINGTON, Jun 24, 2008 (Dow Jones Commodities News via Comtex) -- NSRGF | Quote | Chart | News | PowerRating -- Fonterra Co-operative Group said late Monday it has bought Nestle Australia's yogurt and dairy dessert business, including its Echuca factory, as it moves to boost its Australian presence.

Under the agreement New Zealand-based dairy giant Fonterra will also acquire the long-term rights to manufacture, market and sell Nestle's yogurt brands in Australia under license, alongside its own existing brands. Nestle Australia is a unit of Nestle SA (NSRGY).

Fonterra didn't disclose how much the deal was worth.

"By acquiring Nestle's yogurt and dairy dessert business, it provides us with a national position and complements our existing portfolio where we hold leading national positions in cheese and spreads through our Mainland, Bega and Western Star brands," said John Doumani, managing director of Fonterra Australia.

In 2005, Nestle and Fonterra completed a similar arrangement. Nestle moved out of the collection of milk from farmers and the manufacture of powdered milk in Australia, selling its Dennington factory in Victoria to Fonterra.

Fonterra is the world's largest dairy exporter by sales, with annual revenues of over NZ$13 billion. It is owned by around 11,000 dairy farmer shareholders.

-By Symon Ross, Dow Jones Newswires; 64-4-471-5990; symon.ross@dowjones.com

(END) Dow Jones Newswires

06-24-08 1604ET

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