Fonterra to Sell Stakes in Dairy Auction Platform to NZX, EEX

By Stephen Wright

WELLINGTON, New Zealand--Fonterra Cooperative Group Ltd. said it will sell stakes in its dairy commodities auction system to the European Energy Exchange and the operator of New Zealand's stock market as part of efforts to increase volumes and improve price discovery.

Each owner will have a one-third stake in Global Dairy Trade, which was established by New Zealand-based Fonterra in 2008.

About $2 billion-$3 billion of commodities such as whole milk powder, butter and cheese are traded on GDT annually by buyers and sellers from about 70 countries.

"Dairy is one of the most volatile traded commodities," Fonterra said in a statement Thursday. "This partnership is another step in helping to manage this risk for everyone--from the farmer through to the customer," it said.

Financial terms weren't disclosed. NZX Ltd., the operator of New Zealand's stock market, said it will raise about 44 million New Zealand dollars ($29.4 million) by issuing new shares to fund its investment in the dairy trading system and for other business plans.

Subject to regulatory clearances, the deal could be completed by mid-2022.

Write to Stephen Wright at [e-mail]

(END) Dow Jones Newswires

February 16, 2022 15:27 ET (20:27 GMT)

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