Fonterra Co-operative Group Ltd. has raised its stake in Chilean milk processor Prolesur to 99.9% from 86.2% to streamline its operations in the South American country.
New Zealand-based Fonterra purchased the 13.6% stake from Fundación Isabel Aninat for NZ$29.3 million.
Prolesur sells most of its products to dairy company Soprole Inversiones SA, which is 99.9% owned by Fonterra.
Kelvin Wickham, Fonterra CEO for Asia, the Middle East and North Africa, said the move will allow the company to integrate Prolesur and Soprole's businesses, which is hoped to strengthen the group's performance in Chile.
"Prolesur and Soprole are both strong businesses but their recent performance has been impacted by challenging market conditions," Wickham said. "Having the two more closely integrated will generate operating efficiencies across the supply chain from milk collection to processing and administration.
"It also allows us greater flexibility as we focus on realizing the best value for the Co-op from our businesses in Chile in line with our new strategy."
Fonterra plans to buy the remaining 0.1% of Prolesur's shares from minority shareholders at the same price per share it paid to Fundación for the 13.6% stake.
As of Dec. 18, US$1 was equivalent to NZ$1.52.