Glanbia plc has announced its intention to sell its 40% holding in Glanbia Ireland to Glanbia Co-op for €307 million.
Glanbia Co-Op is owned by the farmers who supply milk to what is the country's largest dairy processor.
The Co-Op owns the remaining 60% of the business.
Glanbia plc says it wants to focus on its two growth platforms, Glanbia Performance Nutrition and Glanbia Nutritionals, as well as strategic joint ventures.
Siobhan Talbot, Group Managing Director of Glanbia plc said:
“Today’s announcement represents the next stage of our transformation journey following many years of successful collaboration with Glanbia Co-op as joint venture partners in Glanbia Ireland. If approved, the Proposed Transaction will continue the alignment of our portfolio to our strategy, which is focused on driving growth through our market leading positions as a brand owner and ingredient solutions provider, playing into strong underlying consumer health and wellness trends.”
The company said the proceeds from the proposed transaction will be primarily invested in growth opportunities with up to 50% of the proceeds being returned to shareholders via a share buyback.
'Careful Scrutiny'
Irish Farmers Association (IFA) President Tim Cullinan said the announcement that Glanbia Co-op intends to take full control of Glanbia Ireland is a significant step for the business.
“This is a complex financial arrangement that will require careful scrutiny before members vote on the proposals. I would ask that Glanbia provide every opportunity for this plan to be discussed ahead of the SGM that will have to take place,” he said.
Mr Cullinan said the IFA will be seeking a meeting with Glanbia as soon as possible to discuss the proposals.
The IFA President said it’s important that suppliers will see benefits from this deal, if it goes ahead.
“Glanbia has a three billion litre milk pool and takes in 270,000 tonnes of grain each year. It’s a major processor and buyer of what farmers produce so they should be a market leader in price,” he said.
IFA Dairy Chairman Stephen Arthur noted the comments by the Chairman of Glanbia Co-op John Murphy that ‘our ambition is to pay the best possible price for milk’.
“Whatever new structure may emerge, it has to return a leading price to the farmers. The business must seek to extract the maximum value from the market for the quality product that we sell to them,” he said.
IFA Grain Chairman Mark Browne said grain farmers would expect any new arrangement, if it goes ahead, to pay a leading price for the quality grains supplied by farmers.
