Fonterra's purchase last week of a 6% stake in Australia-based Bega Cheese was worth more than $1 million less than it paid when the sharemarket closed on Friday.
Photo: RNZ
The dairy giant paid $A46 million, or $A4.95 a share, for its Bega stake and the shares closed on Friday at $A4.83.
Bega shares have risen from $A1.78 a year ago.
Fonterra group director of strategy Maury Leyland says her company wants to participate in the consolidation of the Australian dairy industry.
She says Bega is the number one cheese brand in Australia, Fonterra already markets the brand and supplies Bega with bulk cheese and is a customer of the cutting and wrapping they do at their plant.
Ms Leyland says Fonterra has a positive, constructive and long-term relationship with the Australian firm.
Fonterra had wanted to buy more Bega shares but can not own more than 10% of the company under Bega's own rules.
Its purchase came just hours after Australia's corporate regulator gave Bega approval to take over the Warrnambool Cheese and Butter Company
The Warrnambool company is the target of a three-way takeover battle between Bega, the Murray Goulburn dairy co-operative and Canada-based Saputo.
To further complicate the takeover battle, last month Lion Nathan, owned by Japanese company Kirin, bought a 10% stake in Warrnambool.
