Fonterra Welcomes Full RD1 Ownership
RD1 was formed in 2002 with the consolidation of the trading store networks of both the New Zealand Dairy Group and Kiwi Co-operative Dairies Limited.
7/4/2011 --- Fonterra has acquired 100 per cent of rural supplies chain RD1 in a move that will provide fresh opportunities for its shareholders.
With full control of the nationwide chain of 57 stores, Fonterra can now provide more in-store benefits to its shareholders.
Fonterra sold a 50 per cent stake in RD1 in 2006 to Australian rural supplies chain Landmark, owned by AWB. As part of that agreement Fonterra had a pre-emptive right to buy back RD1 if Landmark or AWB were sold. The opportunity arose in December, 2010, when Canadian company Agrium bought AWB.
Fonterra Chief Executive Officer Andrew Ferrier says Fonterra was excited at the prospect of RD1 rejoining the fold.
“Since 2006, RD1 revenues have increased from $394 million to $741 million, producing great returns for both Fonterra and Landmark,” Mr Ferrier says.
“RD1 is a solidly performing company with strong farming roots and it’s great to have it back in the family.”
Over the next three months Mr Ferrier says Fonterra will review the business and analyse the opportunities before announcing initiatives to better leverage RD1 for shareholders.
“With 100 per cent ownership of RD1 we can do much more with the company in order to deliver value to our shareholders,” Mr Ferrier says.
RD1 was formed in 2002 with the consolidation of the trading store networks of both the New Zealand Dairy Group and Kiwi Co-operative Dairies Limited.
“The time of this acquisition could not be better with both Fonterra and RD1 about to conclude extremely good financial years.
“Further, we see many future advantages for Fonterra’s farmer shareholders using a dairy focused store they own and where all the profits come back to them,” Mr Ferrier says.
Due to rules in the original shareholders’ agreement with Landmark, the purchase price cannot be disclosed.
