Fonterra has sold off its nine percent shareholding in the Australian company Bega Cheese for nearly $78 million, saying it needs to free up capital for more profitable investments.
The dairy co-operative said releasing the capital was the best use of of its farmer shareholders' funds.
It has not publicly identified the buyer.
Fonterra has a commercial arrangement with Bega, which cuts and wraps cheese for it, and uses the brand in Australia under a franchise agreement.
Australian analysts said Fonterra's exit would raise big questions for the future of its business there, which they said had been a dead weight on the company.
University of Waikato Professor Jacqueline Rowarth said the move wasn't suprising because Fonterra paid about $500 million in interest and the Australian company wasn't making money for the co-operative.
Farmers will be relieved that a company which wasn't making money had been sold off, Professor Rowarth said.
The huge amount of debt being carried by Fonterra was supported by the 10,500 farmers that were shareholders, she said.