New Zealand's Fonterra Co-operative Group, the world's largest dairy exporter, said yesterday it is considering an initial public share offering (IPO) that could be worth as much as NZ$2.5 billion (US$1.9 billion).
The plan calls for splitting the cooperative's business operations and listing them as a separate company, while dairy farmers would retain 100 percent ownership of the milk supply business. Only 20 percent of the operations business would be available to the public, with farmers initially holding 80 percent of the listed entity.
Fonterra said in a statement to the New Zealand stock exchange that it was beginning a two-year consultation program with its shareholders to consider the new structure and possible listing.
"What we are considering is a further evolution of our Co-operative to enable Fonterra to continue to adapt, to ensure it remains relevant and competitive in the changing global dairy market," chairman Henry van der Heyden said.
Fonterra estimated that based on its current equity value, the new shares on issue could be worth between NZ$2 billion and NZ$2.5 billion, according to Dow Jones Newswires. That would make it the biggest IPO in New Zealand since Telecom Corp listed in 1991.
Fonterra collects and supplies milk and exports a range of dairy products. It owns brands such as Anchor, Tip Top, Anlene and Mainland and exports to North America, Europe and Asia.
At least 75 percent of the cooperative's dairy farmers would have to approve the restructuring plan and the share sale for it to go ahead.