Glanbia Co-op shareholders to vote on proposal to create Glanbia Ireland joint venture
Glanbia Co-operative Society (Glanbia Co-op) has today announced that it has signed a binding legal agreement with Glanbia plc to establish a new joint venture to be known as Glanbia Ireland.
As announced on 22 February, Glanbia Co-op proposes to pay €112 million to acquire a 60% shareholding in the plc’s Dairy Ireland division, which consists of Glanbia Consumer Products and Glanbia Agribusiness.
Glanbia Ireland will combine Glanbia Ingredients Ireland, Glanbia Consumer Products and Glanbia Agribusiness, as a joint venture 60% owned by the Co-op and 40% owned by the plc. This builds on the successful Glanbia Ingredients Ireland (GII) joint venture established in 2012.
Glanbia Co-op has also confirmed proposals to distribute by way of “Spin-out” c.5.9 million shares in Glanbia plc to all members of the Co-op and to create a €40 million Member Support Fund. The value of the share “Spin-out” is an estimated €100 million based on the Glanbia plc closing share price of €17.13 on Friday 17th February 2017. This 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*.
Subject to Member approval, the Board of Glanbia Co-op proposes to allocate up to €40 million of its resources to a Member Support Fund. This will be 50% funded through the sale of Glanbia plc shares with the balance from Co-op resources.
Payments from the Fund will be in the proportion of 75% patronage to active members and 25% Special Dividend to all Members, with the nature and timing of any payments at the discretion of the Glanbia Co-op Board.
If the proposed transaction is approved by Members, Glanbia Co-op will fund the acquisition of 60% of Dairy Ireland and part fund the €40m Member Support Fund through the sale of c.8.9 million Glanbia plc shares (equal to 3% of the issued share capital of the plc).
Today the Co-op holds 36.5% of the issued shares in Glanbia plc. If all of the proposals above are approved the Co-op would own 31.5% of the issued share capital in Glanbia plc.