A2 refers to the beta-casein proteins found in milk.
The stock gained $2.31 to $11.60, valuing a2 Milk at $8.47 billion, toppling Auckland International Airport at $7.75b, Fisher & Paykel Healthcare at $7.37b and Meridian Energy at $7.29b.
A2 Milk says A1 and A2 proteins affect digestion differently, and its products may benefit people who experience discomfort from drinking cow's milk.
A joint packaging facility will also be explored, as well as development of A1 protein free milk pools in New Zealand and Australia.
Fonterra will be working with their current Australian dairy suppliers and assist them transition to supply A2 milk.
New Zealand, leveraging its fresh milk capabilities to establish distribution across the country.
The aim is to build greater returns for both companies by growing demand locally and internationally using A2 Milk Company's increasingly popular brand strength. These products will be produced at Fonterra's facilities in New Zealand as well as Fonterra's nutritionals facility, at Darnum in Victoria, Australia.
The agreement will also see Fonterra exclusively supply nutritional milk powder products in both bulk and consumer packaged formats intended for sale in A2MC's new priority markets across Southeast Asia and the Middle East.
Five killed in attack on church in Russia's Dagestan
A shooting at a church in Russian Federation has left at least five people dead on Sunday, according to reports . A group that calls itself the local wing of the Islamic State extremist group has claimed responsibility.
"The partnership is meant to fast-track market growth and this creates [an] opportunity for our farmers to create additional value from their milk", said Mr Spierings.
The two companies will explore opportunities for A2 branded butter and cheese, and a jointly-owned packaging factory.
A2 Milk CEO Geoff Babidge and Fonterra chief executive Theo Spierings said in a statement yesterday the new strategic relationship included access to Fonterra's global milk pool and supply chain, manufacturing, sales and distribution.
And looking at A2's interim results yesterday it is no wonder In results released yesterday the dual-listed New Zealand and Australian company reported a 70% jump in total revenue to $NZ434.7 million for the six months through December.
It is dual-listed on both the NZX and ASX and has almost 10 per cent of the fresh milk market by value in Australia.
"An especially pleasing aspect of our performance was the continuing strong growth in market share and sales of a2 Platinum infant formula in China, along with our success in adapting to the evolving regulatory environment in that market", Mr Babidge said.
The share price has soared over the past year and hit $10.80 a share after the latest announcements.
- Pakistan court sentences Zainab's killer to death on four counts
- Justin Theroux drops out of Late Show appearance
- Spotify might be building its very own smart speakers soon
- We gave PSG confidence before Madrid clash - Dijon respond to Rabiot jibe
- Boushie's family meets federal ministers after acquittal in murder trial
- Wales' Leigh Halfpenny ruled out of England clash
- Murray | D-backs acquire Steven Souza in 3-way deal
- Potential Barcelona lineup against Eibar
- Peers believe LeBron James will remain with Cavaliers
- Luis Enrique Would Be A Success At Chelsea- Andres Iniesta