Glanbia Co-op and Glanbia plc have completed negotiations and signed a binding legal agreement on the transfer of the group’s Irish-based operations.
The proposal for the co-op to buy 60% of the consumer foods and agribusiness from Glanbia plc has moved a step closer this Wednesday as both partners signed binding legal agreements to create the Glanbia Ireland joint venture.
This comes as Glanbia announced in a trading update in the morning that group revenues increased 8% and as the plc holds its AGM this Wednesday in Kilkenny.
Glanbia Co-op shareholders will be asked to vote on the proposal on 18 May at a special general meeting (SGM) in Punchestown. The proposed transaction will also be subject to approval by Glanbia plc’s shareholders via an extraordinary general meeting (EGM) on 22 May.
Spin-out
Glanbia Ireland will be a joint venture 60% owned by Glanbia Co-op and 40% owned by Glanbia plc. The co-op is also proposing to spin out €100m Glanbia plc shares to co-op members and also create a €40m member support fund to support dairy and grain prices in times of low market returns.
Glanbia co-op is proposing to pay €112m to acquire a 60% shareholding in the plc’s Dairy Ireland division, which consists of consumer products and agribusiness, and combine this with Glanbia Ingredients Ireland to create Glanbia Ireland.
The spin-out would be worth approximately €6,637 for a member with the average shareholding. For active dairy farmer members, the average value of the spin-out would be €10,791.
Henry Corbally, chair of Glanbia co-op, said: “The proposed creation of Glanbia Ireland is an exciting development for Glanbia farmers. It brings the strong portfolio of Glanbia’s Irish dairy and agribusiness assets into majority co-op ownership, while building on the strong partnership with Glanbia plc. I would encourage all members to familiarise themselves with these proposals and to attend our SGM”.
Siobhán Talbot, group managing director of Glanbia, said: “Having established GII and successfully managed the transition to a post-quota milk environment, there is a compelling rationale to combine the Irish businesses and supply chain to create efficiencies and scale. GII suppliers plan to supply 30% more milk in 2020 than in 2016. The financial strength of the Glanbia Ireland business will allow it to fund a €250m to €300m investment programme to 2020 without a requirement for supplier contributions.”
If all of the proposals are approved, the Co-op would see its ownership in the plc fall from 36.5% to 31.5%.
By Eoin Lowry
Source: Irish Farmers Journal
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