Australasian food company Goodman Fielder has agreed to sell Champion Milling in New Zealand for NZ$51m ($42.43m) to Nisshin Flour Milling, a leading miller in Japan.
This deal is a part of the company's plan to focus on core categories and strengthen its balance sheet.
In addition to the sale, Goodman Fielder has formed a long-term agreement with Nisshin. Under the agreement, Nisshin will supply flour and related products to Goodman Fielder's business in New Zealand. Goodman Fielder will continue to sell flour to retailers, in-store bakeries and hot bread shops, while Nisshin will cater to commercial and industrial customers in New Zealand.
Nisshin noted that it plans to retain all the existing staff and will offer new contracts shortly.
The proceeds from the sale will be used by Goodman Fielder to lower debts and strengthen its balance sheet. The transaction, which is subject to the satisfaction of conditions, is expected to be completed in February 2013.
Nisshin, which is listed on the Tokyo Stock Exchange, has flour milling market share of approximately 40% in Japan. It has milling capacity of greater than 8,000 tons per day, with revenues of JPY170bn ($2.06bn).
