Bright Dairy to sell Synlait’s North Island assets for $170m

Bright Dairy & Food's board has approved the sale of Synlait Milk Limited's North Island assets to Abbott Nutrition NZ Limited for $170 million, with Abbott Ireland acting as guarantor. This divestiture aims to address underutilized capacity and substantial losses at the North Island factory, which has negatively impacted Synlait's overall profitability. The transaction is projected to increase Synlait's 2026 fiscal year net profit by NZD10 million to NZD15 million. The deal is expected to close by April 1, 2026.

In conjunction with the asset sale, Bright Dairy has also approved Synlait’s plan to engage in forward foreign exchange contracts up to $170 million. This measure is intended to mitigate currency fluctuation risks between the USD sale proceeds and Synlait's NZD accounting base, ensuring the stability of the transaction's value. The company stated that the foreign exchange hedging activities are for risk mitigation, not speculation, and will be conducted within 90-100% of the asset sale's value.

Both the asset sale and the foreign exchange hedging initiatives were reviewed and approved by Bright Dairy’s Eighth Board of Directors. The asset sale requires further approval from Synlait's shareholders and the New Zealand Overseas Investment Office. These actions align with Bright Dairy's strategy to optimize operational efficiency, reduce leverage, and enhance investor confidence.