New Zealand-based dairy cooperative Fonterra has agreed to divest its two-joint venture (JV) farms in China to Singapore-based AustAsia Investment Holdings for a consideration of $115.5m.

Fonterra, which holds a 51% stake in the farms located in Shandong province, will receive $61.5m (NZ$88m) in proceeds from this divesture.

Fonterra CEO Miles Hurrell said: “The sale of the JV farms allows us to focus even more on our farmer owners’ milk and follows the sale of our two wholly-owned China farming hubs earlier this year.

“Greater China continues to be one of our most important strategic markets. We remain committed to our China business, bringing the goodness of New Zealand milk to Chinese customers in innovative ways and partnering with local Chinese companies to do so. We are well placed to continue to grow our business in Greater China.”

The deal is expected to close on 30 June 2021 and requires no further regulatory approvals.

Hurrell further added that the divesture of the two JV farms is in line with the company’s strategy of prioritising New Zealand milk.

In April, Fonterra also divested its wholly-owned China farming hubs in Shanxi and Hebei provinces to Inner Mongolia Youran Dairy for $386m (NZ$552m).

The deal was announced in October last year and subject to anti-trust clearance and other regulatory approvals in China, which took place this year.

In December 2019, Fonterra expanded its presence in Chile with the acquisition of a minority stake in milk processing company Prolesur.

Under the deal, Fonterra acquired a 13.6% stake in Prolesur from Fundación Isabel Aninat (the Fundación) for a consideration of NZ$29.3m ($19.2m).