(Reuters) - New Zealand's Fonterra (NZ:FCG) (NZ:FSF) said on Monday it has agreed to sell its farms in China for a total of NZ$555 million ($367.97 million) as the dairy producer continues to focus on the domestic market and reduce debt.
The company unveiled plans last year to halt overseas expansion after being criticised by the more than 10,000 farmers who make up its cooperative for its foray into countries like China and value added consumer products that were weighing on its profits.
"For the last 18 months, we have been reviewing every part of the business to ensure our assets and investments meet the needs of the Co-op today," Chief Executive Officer Miles Hurrell said.
"Selling the farms is in line with our decision to focus on our New Zealand farmers' milk."
After the sale, the company will also be able to better prioritise its efforts in the foodservice, consumer and ingredients business in China, its biggest market, it added.
China Youran Dairy Group will purchase two farming-hubs located in Ying and Yutian for NZ$513 million, while Beijing Sanyuan Venture Capital is set to acquire an 85% stake in the Hangu farm.
The dairy giant said it will use the cash proceeds from the deal to pay down debt further, which it has already managed to reduce by NZ$1 billion, as of September.