New Zealand dairy co-operative Fonterra has confirmed the sale of its Tip Top brand to global ice cream giant Froneri for $380 million.
Word of the deal got out a week ago, when the Australian Financial Review reported the sale was in the works.
Fonterra bought the business in 2001, but says it did not want to invest in upgrading and modernising the business as the co-operative looked to cut its debt and get back to basics.
Froneri is the third largest ice cream manufacturer in the world, selling brands in 20 countries.
The global company's chief executive, Ibrahim Najafi, says it would keep the Tip Top name and continue to operate from the Auckland-based factory in Mount Wellington.
"We have always admired Tip Top as New Zealand's favourite and most trusted ice cream brand," Ibrahim says.
"The acquisition enhances our scale and supports our vision to build the world's best ice cream company."
Fonterra chief executive Miles Hurrel says it would maintain ownership of the Kāpiti brand.
"We... will be licencing its use for ice cream to Froneri. This means our popular Kāpiti cheese isn't going anywhere."
The deal will be settled at the end of May, but a transition period of a few months is expected.
Fonterra says the sale represented a gain of about $100 million above Tip Top's book value, which would have a positive six cents per share impact on earnings.
However, it was too early to predict the impact on this financial year's earnings of the overall plan to sell parts of the business, with the sale of Fonterra's DFE Pharma division still a possibility, the co-operative says.