Goodman Fielder sells division for A$240m

Food and dairy company Goodman Fielder Ltd has agreed to sell its edible fats and oils operations to global food and agricultural products group Cargill for A$240 million.

Goodman Fielder managing director Peter Margin said the sale price was a significant premium to the carrying value of the business.

``As a consequence of our strategic decision earlier this year to focus on our consumer brand portfolio, we decided that, as a commercial industrial business, it did not fit comfortably with our major strategic focus, and that therefore the funds employed in this business would be better utilised elsewhere,'' Mr Margin said in a statement on Thursday.

``The sale of these assets will allow the company to focus on our core business which is the manufacturing and marketing of everyday branded consumer foods.

``We will now concentrate on enhancing the strength of our outstanding portfolio of retail consumer brands.''

The deal includes a 10-year supply agreement under which Cargill will supply refined fats and oils products to Goodman Fielder for Goodman's Home Ingredients brands and businesses.

The sale includes four fats and oils refining facilities.

Goodman will retain title to the land at the Brisbane facility, subject to an extended lease-back to Cargill.

Goodman's New Zealand flour milling operations are not part of the sale.

Goodman will also keep part of its food service operations that does not relate to fats and oils.

The sale is subject to approval from the Australian Competition and Consumer Commission (ACCC).

Goodman Fielder shares were 1.5 cents higher at $1.625 at 1034 AEDT on Thursday.

- AAP