Synlait Milk Divests North Island Dairy Assets to US Customer Abbott for NZ$307m

Dairy manufacturer Synlait Milk (ASX: SM1) has entered into a A$270 million (NZ$307m) deal to divest its North Island assets to US healthcare group Abbott.

The sale will include the company’s Pōkeno factory, a blending and canning facility in Auckland, a warehouse facility, and associated inventory and leasehold arrangements.

Abbott has been a customer of Synlait since 2020 and Synlait’s majority shareholder, Bright Dairy Holding (which has 65.25% equity) has stated it will vote all its shares in favour of the transaction, thereby satisfying the shareholder approval condition.

‘A Real and Vibrant Future’

Synlait’s board of directors has confirmed its support for the North Island sale and unanimously recommended shareholders vote in favour of resolution, with chair George Adams saying the divestment would be a “defining moment” for the embattled company.

“This valuable reset presents Synlait with a rich opportunity to move beyond crises to planning a real and vibrant future—it is a turning point we have fought hard for, and are ready to embrace,” he said.

“This sale will strengthen our financial position and allow us to significantly reduce our debt, and we are pleased that Abbott has agreed to retain the vast majority of our people who work in our assets at completion—that is a great outcome for all.”

The divestment will enable Synlait to refocus on its core operations at Canterbury and maintain a renewed emphasis on operational stability at its Dunsandel manufacturing facility, which it expects to help drive longer-term profitability.

Full-Year Financial Results

Synlait recorded an adjusted net profit after tax of NZ$800,000 (unadjusted NZ$39.8m) for financial year 2025, along with a 55% reduction in debt from NZ$551.6m to NZ$250.7m.

Unadjusted EBITDA increased by $54.8m on the previous period to $NZ50.7m, while a turnaround in the Ingredients business unit delivered a gross profit of NZ$13.1m and the Advanced Nutrition business registered a 29% increase in gross profit to NZ$95m.

A 92% lift in Foodservice production volumes returned improved margins, although the company said it would need to make further gains to deliver profitability, and growth in export markets including entry to Thailand and Vietnam helped deliver a 28% gross profit improvement in the Consumer business unit to NZ$39m.

Synlait recorded a new record milk price for the 2024/2025 season of NZ$10.16 per kilo of milk solids, which will see the company’s estimated contribution to New Zealand’s rural economy exceed $1 billion dollars (including payments to farmers).