UPDATE 1-New Zealand's Fonterra to sell stakes in two China farms for $62 mln

(Adds details of deal breakup, background on reorganisation)

June 28 (Reuters) - Fonterra Co-Operative Group Ltd said on Monday it will sell its stakes in two joint-venture farms in China’s Shandong province to Singapore-based AustAsia Investment Holdings for NZ$88 million ($62 million).

The sale comes amid a retreat by the world’s largest dairy exporter since 2019 from an ill-fated overseas expansion that drew sharp criticism from its 10,000-plus farmer-shareholders.

Fonterra, which owns 51% of the two farms, said the sale is not subject to any regulatory approvals and is unconditional.

AustAsia, 75% owned by Singaporean agri-food company Japfa Ltd, will buy the farms outright for $115.5 million, with the difference being paid to Fonterra’s joint venture partner, the New Zealand co-operative said.

“Greater China continues to be one of our most important strategic markets. We remain committed to our China business,” Chief Executive Officer Miles Hurrell said in a statement.

The dairy giant in April sold two fully owned farms in China to Inner Mongolia Youran Dairy for NZ$552 million.

$1 = 1.4156 New Zealand dollars Reporting by Nikhil Kurian Nainan in Bengaluru; Editing by Kim Coghill and Christopher Cushing