Wexford Milk Producers (WMP) co-op members have voted to sell Wexford Creamery to Glanbia Ingredients Ireland.
The deal included the purchase by Wexford Milk Producers of the 30% it didn’t own for €3m from UK processor Dairy Crest.
The transaction, approved in a 57% for and 43% against vote by 326 co-op members, remains subject to Competition Authority approval.
Jim Bergin, CEO of Glanbia Ingredients Ireland Ltd (GII), said: “We look forward to continuing to build on what has been a long, and mutually beneficial relationship with Wexford Milk Producers over many years involving milk supplies, cheese manufacture and whey supplies.”
The €20m deal will boost GII’s supply of milk by 100 million litres per year, and processing capacity by 200 million litres, and includes some Wexford brands.
Mr Bergin said: “Subject to Competition Authority approval, we hope to complete the transaction in quarter one 2014, which will allow us to work in partnership with Wexford to optimise the opportunities presented by milk quota abolition and to build a sustainable business for all concerned into the future.”
The deal included GII making a cash payment of €3.7m to WMP, to fund the purchase of the Dairy Crest stake, and pay towards a dividend which could be worth up to €2.2m to WMP members.
The Wexford deal is GII’s first foray into the consolidation of Irish milk processing which many believe is necessary to strengthen the industry.
GII, formed nearly 12 months ago as a joint venture between Glanbia Plc and the farmer-owned Glanbia Co-op, is Ireland’s largest dairy processor, handling 30% of the national milk pool (1.6bn litres) and 40% of the whey pool.
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