Glanbia agrees dairy unit deal

Glanbia has reached initial agreement with its majority shareholder — Glanbia Co-operative Society — regarding the future ownership of its dairy ingredients processing unit.

The two entities have signed contracts to enter into a joint venture ownership arrangement for Dairy Ingredients Ireland — the country’s largest dairy ingredient processor — and have set a date for members to vote on the matter.

Currently, a €700m revenue-generating business unit of Glanbia plc’s dairy Ireland division, Dairy Ingredients Ireland is set to fall under a new joint venture: 40% controlled by Glanbia and 60% owned by Glanbia Co-Op.

The move could result in the co-op’s shareholding in Glanbia plc decreasing from 54.4% to 41.1%.

According to Glanbia’s group managing director John Moloney, the move will ensure a continuation of “strong and complementary links” between the plc and the co-op, “within a structure that better accommodates the strategic interests of society members”.

It will also, he claimed, enable Glanbia plc to continue its international growth strategy “and to maximise value for all shareholders”.

“At this point in our development, we face clear strategic choices as we approach a post-quota era. The proposed new joint venture is based on an existing, well-invested, and profitable international dairy ingredients business.

“This creates a strong platform from which to grow milk volumes and to capture the benefits arising from increased milk production and processing, post the abolition of milk quotas.”

Co-op members are set to vote on the joint venture plan on Nov 13 and all members were yesterday urged to vote in favour of the deal by Glanbia Co-operative Society management.

“We believe that now is the correct time to evolve the existing co-operative and plc model,” said Glanbia chair Liam Herlihy.