GFF to sell edible fats and oils operations
Goodman Fielder Limited (GFF) said it has entered into an agreement to sell its Commercial division edible fats and oils operations to Cargill for $240 million. The company said the sale price of the business, which processes edible fats and oils and supplies food manufacturers and wholesalers in Australia and New Zealand, was a significant premium to the carrying value of the business.
Goodman Fielder’s managing director, Peter Margin, said the business did not fit with the company’s strategic focus as a consequence of its decision earlier in the year to focus on its consumer brand portfolio.
The company said the sale agreement includes a 10-year supply agreement whereby Cargill would supply refined fats and oils products to Goodman Fielder in multiple formats for Goodman Fielder’s Home Ingredients brands and businesses.
Goodman Fielder said the asset sale includes the Commercial business’s four fats and oils refining facilities, while the company would retain title to the land at the Brisbane facility, subject to an extended lease back to Cargill.
Goodman Fielder’s New Zealand flour milling operations are not part of the sale and the company said it would also retain ownership of the part of its food service operations that does not relate to fats and oils.
“The sale of these assets will allow the company to focus on our core business which is the manufacturing and marketing of everyday branded consumer foods,” Mr Margin said.
As at 1022 AEDT, Goodman Fielder shares were up 2c to $1.63.
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