Nestle is buying back milk powder factories in Latin America it has been running as a joint venture with Fonterra.
Under new arrangements for the joint venture, Nestle will take sole ownership of factories in Brazil, Argentina, Ecuador and Colombia.
Nestle will also buy Fonterra's share of a liquid dairy business in Ecuador. A chilled and liquid dairy business in Venezuela will go back to Fonterra.
Fonterra expects to get about US96 million in the next financial year to reflect the value of the assets it is giving up.
The joint venture will remain in Brazil for the commercialisation of chilled dairy, with Fonterra taking a 51 percent stake and Nestle 49 percent.