Bonlac shareholders have voted in favour of a full takeover of Bonlac Foods Ltd by Fonterra Co-operative Group.
The vote was 94 per cent in favour of the plan to make Bonlac a wholly owned subsidiary of the New Zealand dairy producer.
Fonterra chairman Henry van der Heyden said the company would now increase its milk supply, improve its balance sheet and create greater manufacturing scale and efficiencies.
"Full ownership of Bonlac is entirely consistent with our key objectives in Australia and now it is up to Fonterra to go ahead with plans to build more efficient production, a stronger domestic branded business and contribute further to a globally competitive sector," he said.
Fonterra announced in June it wanted to increase its stake in Bonlac from 50 per cent to full ownership.
Fonterra chief executive Andrew Ferrier said the company would first optimise capacity at Bonlac's plants to grow its milk supply.
"This is a successful and significant step for us in Australia but we still believe there is further consolidation to come in the industry here," he said.
"We see this as a key local market for Fonterra and we will be part of any further industry changes."
Fonterra walked away from its proposed takeover of National Foods in April after losing to Philippines-based San Miguel.