Fonterra’s National Foods buyout could drag on

NEW ZEALAND/AUSTRALIA – Fonterra appears to have accepted the fact that its purchase of National Foods is going to be neither quick nor clean with the announcement that it has extended the deadline for its offer for shares from late December to 1 February.

Fonterra has also labelled National Foods’ valuation and growth forecasts as “aggressive and extremely high”. Chief executive Andrew Ferrier said that although while National Foods has done a good job in the past, increasing competition from the likes of Dairy Farmers, Parmalat and Nestle brought the predictions into question. He also said that the potential of new companies such as Coca Cola Amatil could also pose a threat to National Foods.

He went on to say that, although Fonterra is keen to enter the fresh milk and yogurts market in Australia, National Foods is not its only option.