Multinational dairy co-operative Fonterra has 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 consideration of NZ$29.3m ($19.2m).

With the acquisition, the company increased its ownership stake in Prolesur from 86.2% to 99.9%.

The remaining 0.1% in Prolesur will be held by minority shareholders, which Fonterra will offer to purchase at the same price per share.

Prolesur sells most of its produce to Soprole, a consumer branded dairy company in Chile, 99.9% owned by Fonterra.

Fonterra CEO Kelvin Wickham said: “Prolesur and Soprole are both strong businesses but their recent performance has been impacted by challenging market conditions.

“Having the two more closely integrated will generate operating efficiencies across the supply chain from milk collection to processing and administration.

“It also allows us greater flexibility as we focus on realising the best value for the Co-op from our businesses in Chile in line with our new strategy.”

The acquisition will allow Fonterra to streamline its operations in Chile, as well as provide a platform to integrate Prolesur and Soprole businesses.

In a separate development, Fonterra appointed Teh-Han Chow as its interim CEO for the Greater China region.

Before joining Fonterra in 2015, Teh-Han served as Louis Dreyfus China CEO and also as Simplot Greater China managing director.

In June last year, Fonterra established new channel Beverage House within its global foodservice business to capitalise on the growing demand for tea and coffee drinks.