Goodman Fielder is to sell its Champion Milling business in New Zealand to Nisshin Flour Milling for $A40.88 million.
The bread company said the buyer is Nisshin Flour Milling of Japan and its parent, Nisshin Seifun Group. The sale will take effect in February 2013.
Chief executive Chris Delaney said on Friday the transaction was consistent with the company's strategy to optimise its portfolio by focusing on its core categories.
AAP reports the company said it had structured a long-term supply partnership with Nisshin to ensure Goodman Fielder maintains an efficient supply of flour and related products for its New Zealand business.
Nisshin is the largest flour miller in Japan with a market share of about 40% and milling capacity of more than 8000 tonnes per day.