Fonterra has struck a deal to buy the processing assets of New Zealand Dairies, which went into receivership last month.
Russian baby food group Nutritek acquired a majority stake in New Zealand Dairies in 2008 and aimed to use the business for international expansion.
Nutritek acquired the rest of the New Zealand firm in 2009 but, according to local reports, has been on the market since 2010. It collapsed owing suppliers around NZ$30m.
Fonterra, which is the largest dairy company in New Zealand, said its acquisition of the business was subject to competition approval.