Call for shareholders to support Glanbia’s proposals for joint venture

The president of the Irish Co-operative Organisation Society (ICOS) Bertie O’Leary has called on Glanbia shareholders to vote “yes” and pave the way for the creation of Glanbia Ingredients Ireland.

And IFA president John Bryan disclosed a meeting was held in Portlaoise of IFA elected officers in the Glanbia area, to review independent professional reports from Deloitte corporate finance and Eversheds pension experts regarding the key aspects of the Glanbia JV proposals.

He said the assessments were reassuring on the key issues the IFA had asked them to investigate on behalf of farmers. Subsequent to the discussions, the IFA has written to Glanbia seeking clarification on a number of other issues previously raised by the IFA.

The IFA executive council is meeting tomorrow and will be deciding on the association’s position on the Glanbia JV proposals. The IFA hopes to have all matters clarified with Glanbia in advance of this meeting.

Glanbia co-op members will vote on Nov 13 on the proposals by Glanbia whether or not to create Dairy Ingredients Ireland (DII) which will then become a joint venture, Glanbia Ingredients Ireland, which will focus on preparing for the abolition of milk quotas in 2015.

The joint venture will include the assets of DII which generated earnings of €44m before tax in 2011.

In order to fund the purchase, the co-op will sell 3% of its shareholding in Glanbia, taking its shareholding to 51.4%. To go ahead with this portion of the buyout, the co-op would require approval of at least 50% of its members.

Mr O’Leary, whose organisation represents 150,000 individual members, employing 12,000 people in Ireland, and a further 24,000 people overseas, urged his members to vote yes.

“This new joint venture company rebalances the relationship between the co-operative and the plc in a manner that is positive for the co-operative and its members,” he said.

He said the farmers and milk producers would gain greater control of Glanbia beyond the farm gate.

“For active milk suppliers who are shareholders in Glanbia, the new model gives greater control and ownership of assets that are of most strategic importance to them in determining their livelihood beyond the farm gate,” he said.

“The proposed new joint venture company also provides a potential platform for enabling structural change for the entire milk sector. It has the potential to attract alliances with existing established processing co-operatives that will create further economies of scale and the potential to allow for a more coherent approach to export marketing of dairy products,” he added.

* Tomorrow: Joe Gill gives his verdict on the proposed Glanbia joint venture.