Fonterra said it was selling Soprole to Gloria Foods, a consumer dairy market leader in Peru. Photo: RNZ / Cole Eastham-Farrelly
Fonterra has sold its Soprole business in Chile for $1.055 billion.
The dairy giant announced in April it would divest the company in order to focus on New Zealand milk.
"We are now at the end of the divestment process and have agreed to sell Soprole to Gloria Foods, a consumer dairy market leader in Peru," Fonterra chief executive Miles Hurrell said.
Soprole was a very good business but did not rely on New Zealand milk or expertise, he said.
Divestment was subject to a number of conditions such as regulatory approvals.
"Fonterra remains committed to targeting a significant capital return to our shareholders and unitholders.
"The Fonterra Board intends to make a final decision on the amount and timing of any capital return once the sale agreement is unconditional, cash proceeds are received in New Zealand and having regard to other relevant factors including Fonterra's debt and earnings outlook at such time."