Farmer shareholders at New Zealand dairy co-op Fonterra have approved the scheme of arrangement for the expected capital return from the sale of its global consumer and associated businesses.
At an online special meeting, 98.85% of the total shareholder votes cast were in support of the capital return proposal.
The result means Fonterra can now seek final court approval for the capital return of NZ$2 per share to shareholders and unit holders, subject to the divestment of Mainland Group to Lactalis being completed.
Fonterra expects the transaction to be complete in the first quarter of the 2026 calendar year, subject to separation of the businesses from Fonterra and provided the remaining regulatory approvals are received within the expected timeframes.
Once these steps have been completed, the co-op will confirm the record date for the capital return, which will be within the five business days prior to the capital return payment being made to shareholders and unit holders.
Meanwhile, the co-op has lifted its forecast farmgate milk price for the 2025/26 season and narrowed its forecast range.
Related: Fonterra’s farmer-owners approve sale of global consumer business
The midpoint has increased from $9 per kgMS to $9.50 per kgMS, with the forecast range lifting and narrowing from $8.50-$9.50 per kgMS to $9.20-$9.80 per kgMS.
CEO Miles Hurrell says the changes are based on recent improvements in global commodity prices combined with Fonterra’s “well-contracted sales book”.
“As we have seen, global dairy prices have been volatile across the season,” he added. “Following the declines at the end of 2025, prices have lifted in the last four Global Dairy Trade events.
“Global milk production remains above seasonal norms, meaning the risk of further volatility in pricing remains. As such, we continue to take a balanced approach with our Farmgate Milk Price forecast.
“Our team is focused on enhancing returns for farmer shareholders through the Farmgate Milk Price and earnings, by delivering on our strategy.”
Fonterra adds that it intends to pay out 100% of underlying earnings generated by Mainland during FY26 while still under Fonterra ownership.
The earnings will be distributed through a special Mainland dividend payment to shareholders and unit holders following the completion of the sale.
“We are currently finalising our interim accounts and can indicate that we expect the special Mainland dividend to be in the range of 14-18 cents per share,” said Hurrel, “which reflects the operating performance of the Mainland business during the first half of this year driven by ongoing cost management and favourable input commodity prices.
“This remains subject to the settlement date of the transaction and the finalisation of our financial statements and audit process.
“Fonterra’s FY26 forecast earnings guidance from continuing operations remains unchanged at 45-65 cents per share. It is intended that Fonterra’s dividend policy will be applied to these continuing earnings.
“Our interim dividend from continuing operations will be confirmed when we release our FY26 interim results and an update on the special Mainland dividend will be given at this time.”
