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Research article - Peer-reviewed, 2015

Factors behind the Fonterra Shareholders’ Rejection of the Board’s Capital Restructuring Plan of 2007

Nilsson, Jerker; Rydberg, Charlotta


The New Zealand dairy cooperative Fonterra is one of the largest in the world. In 2007, its Board presented a capital restructuring proposal with the aim of reducing the equity redemption risk, solving members' portfolio problems, and acquiring capital for the cooperative. The proposal indicated that external owners would be allowed, but that members would own most of the stock. The shareholders rejected the proposal. This analysis of why the proposal failed shows that two specific characteristics of Fonterra were primarily responsible: The shareholders considered the Fair Value Share to be instrumental in securing full member control and the Shareholders' Council effectively channeled members' opinions.

Published in

Journal of Cooperatives
2015, volume: 30, pages: 1-27

Authors' information

Swedish University of Agricultural Sciences, Department of Economics
Rydberg, Charlotta
Federation of Swedish Farmers (LRF)

UKÄ Subject classification

Business Administration

URI (permanent link to this page)