Britannia buys out Fonterra's stake in New Zealand JV

Soon after having bought out Groupe Danone SA's its 25.48-per cent stake two weeks back, Britannia Industries Ltd yesterday announced that it was buying out its partner Fonterra Brands (Mauritius Holding) Ltd's 49-per cent shareholding in Britannia New Zealand Foods Pvt Ltd  (BNFZ), the Brittania-Fonterra dairy joint venture.

Vinita Bali, MD, Brittania IndustriesWith this, the Wadia group now fully controls all its food businesses.

The acquisition makes BNZF a fully-owned subsidiary of Britannia Industries. The companies did not disclose the value of the deal, but Fonterra said it is transferring the stake at a "nominal value''.

Bloomberg quoted a Fonterra executive as saying that the holding, acquired in 2002 for $19.8 million, had been written down in the past two years. "We've taken the decision to exit at a nominal value and be released from any loan guarantees or any further liabilities,'' he said.

Britannia had started its dairy business in 1997, and Fonterra - one of the world's largest exporters of dairy products and a cooperative owned by 13,000 New Zealand farmers - entered as a partner in 2002. BNZF makes and markets products like cheese, butter, ghee, curd and paneer.

Vinita Bali, managing director and chief executive of Britannia, told CNBC-TV 18 that bakery and dairy operations would be key growth drivers. "We may enter into new segments apart from bakery and dairy in the next few months. The company is confident of seeing aggressive growth rate in business and are still looking at double-digit growth," she said, but added that the economic slowdown may effect growth by a couple of percentage points.