Nestlé, the world's biggest food group, said on Thursday it was negotiating an alliance in the North, Central and South American dairy markets with New Zealand's newly-formed Fonterra Cooperative Group.
A Nestlé statement said the aim was to form a number of joint ventures that are still subject to regulatory acceptance.
Fonterra chief executive officer Craig Norgate described the plan as "without doubt New Zealand's biggest ever commercial deal.
The joint ventures would include milk foods and beverages but not cheese, butter or infant formula.
The statement said the two companies expected "considerable benefits" from their alliance but no figures were mentioned.
It added that both partners had a long history of association with farmers and expected to make an important contribution toward developing fresh milk production in Latin America, which would progressively improve farmers' total earnings.
Fonterra, New Zealand's largest company, operates in 120 countries and earns more than 20 per cent of New Zealand's export receipts.
Commenting on the plans, Nestlé chief executive officer Peter Brabeck-Letmathe said Fonterra would bring to the alliance "universally recognised expertise in development of dairy farming, livestock and milk technologies and in large-scale milk procurement, processing and management, as well as strong market positions in a number of countries throughout the Americas."
swissinfo with agencies