Fonterra, CIC eye VDL: report

New Zealand dairy giant Fonterra and the state-owned China Investment Corporation (CIC) have proposed to buy Australia's oldest dairy producer, Tasmania-based Van Diemen's Land (VDL), according to The Australian.

The proposed deal could see CIC emerge with nearly half of VDL as part of a $200 million deal that could join ADM's $3 billion bid for GrainCorp Ltd as an early test of the incoming coalition government's approach to foreign investment.

VDL is currently owned by the investment management arm of the New Plymouth District Council in New Zealand and had been widely flagged as being for sale, with CIC identified as an interested potential buyer.

VDL is already a supplier for Fonterra and late last year Fonterra was rumoured to have held talks with CIC about investment opportunities.

As part of the proposed deal, VDL would partner with Fonterra to buy half of the VDL business.

The Australian reported that VDL chief executive Michael Guerin declined to comment on the speculation, as did Fonterra.

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