The European Commission today cleared the joint venture between Swiss food group Nestle and New Zealand's dairy cooperative Fonterra to produce and distribute dairy products in North and South America.
The companies announced earlier this year that they would form a new company Dairy Partners Americas to distribute dairy products in Central America, the Caribbean, and countries of the North American Free Trade Agreement. Financial terms of the deal were not revealed.
"The proposed operation will not have any effect on the European Economic Area," the Commission said in a statement.
The venture will cover a wide range of dairy products, including shelf stable as well as chilled refrigerated milk foods and beverages, under the existing brands of the two partners. Infant formula, evaporated and condensed milks, certain speciality products, cheese and butter are not covered by the alliance. The joint ventures will be managed by senior executives from both founding partners, reporting to a joint supervisory board of six members.
Both partners are hoping for sales growth in existing and new markets and cost efficiency through the use of their respective infrastructures. There will also be better use of resources in distribution and combined manufacturing strengths and research and development.