Fonterra is cutting its stake in the Chinese infant formula manufacturer Beingmate after failing to find a buyer for the whole stake.
The dairy co-operative has an 18.8 percent in Beingmate and signalled it was reviewing its ownership as part of its plan to turn around its business.
"As part of this, we have re-evaluated every investment, major asset and partnership to ensure they still meet the co-operative's needs today," said chief executive Miles Hurrell.
"This started with a strategic review of our relationship with Beingmate, which has been disappointing."
Fonterra invested in Beingmate in 2015 for about $754 million.
However, Beingmate was a money loser in 2016 and 2017, with only a small profit in the last financial year.
Fonterra wrote down the value of its investment by $35m in 2017 and another $439m last year, which was the key factor in the co-operative posting its first loss.
Since then it has been unwinding its joint venture with Beingmate, bringing the distribution of Anmum formula in China back in-house, as well as ending an Australian based joint venture, Darnum, and buying back the facility while reaching a multi-year agreement for Beingmate to buy Fonterra products.
Mr Hurrell said the stake in Beingmate was now viewed as a financial investment only.
"We have talked to a number of parties regarding the potential sale of our entire stake in Beingmate, but so far have been unsuccessful in finding a buyer.
"From here, it's about making pragmatic decisions to get the best outcome for the co-op from our holding in Beingmate," he said.
Mr Hurrell said China continued to be one of Fonterra's most important markets.
"We've got a strong business there and are still very much focused on the areas in China where we can succeed."
Fonterra's review has so far resulted in it cutting back its Australian operations, selling the Tip Top ice cream company and a German food supplements company, and reviewing ownership of two Chinese dairy farm hubs and its near half share in a Brazilian dairy group.
It aims to cut its debt by $800m in the current financial year.