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Friday 28 July 2017

Farmers get €100m windfall in new Glanbia share deal

Eamon Sweeney, from Termonfeckin, Co Louth, and Paddy Halliday, from Ballymackenny, Drogheda, Co Louth, at the Glanbia meeting in Punchestown Photo: Tony Gavin
Eamon Sweeney, from Termonfeckin, Co Louth, and Paddy Halliday, from Ballymackenny, Drogheda, Co Louth, at the Glanbia meeting in Punchestown Photo: Tony Gavin
Louise Hogan

Louise Hogan

Farmers are in line for a €100m payday after voting in favour of a spin-out of valuable shares in dairy giant Glanbia plc and the purchase of a slice of key agri-business and consumer foods companies.

Almost 2,400 farmer members of Glanbia Co-op descended on Punchestown Event Centre where they pushed the deal over the line with over 90pc in favour.

The co-op will now spin out 5.9 million shares in Glanbia plc to all members. Based on the Glanbia plc closing share price of €17.13 from February, the value of the spin-out is estimated at €100m.

For active dairy farmer members, the average value of the spin-out would be €10,791. This would be worth approximately €6,637 for a member with the average shareholding.

It had been expected farmers would back the deal with around €10,000 worth of shares on the table for active Glanbia farmers after a volatile two years that saw sharp dips in dairy and grain prices.

The deal saw the Co-op's farmers agree to form a new joint venture Glanbia Ireland to run the network of more than 50 agri-business stores and take over well-known brands such as Avonmore and Kilmeaden cheese.

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Farmers voted over 91pc in favour of sharing out €100m of the co-op's stake in the plc amongmembers through the spin-out of 2pc of the plc shares.


Henry Corbally, Glanbia Co-op chairman, said the overwhelming vote in favour of taking the majority stake was a "historic day for the co-op" and an "exciting development" for Glanbia farmers.

"We know that we carry a heavy responsibility into the future as farming has become a more difficult place to make a living as margins are squeezed but we feel that this organisation will do its very utmost to help resolve that and keep farming in as good a place as possible," he said.

It is estimated that close to €640m in shares and patronage options has been transferred to co-op farmer shareholders since they first agreed to part with some of their plc holdings in 2012. Some criticism had been levelled at the deal at farmer meetings as they raised concerns over the dilution of the farmer influence on the €5bn Kilkenny-based Glanbia plc through the loss of seats on the board of the plc as part of the agreement.

The co-op's current 36.5pc stake in the plc amounts to €2bn. However, the sale of the 5pc stake will see its ownership drop to 31.5pc.

At the special general meeting, farmers voted in favour of cashing in 3pc of their plc stake to pay €112m to acquire a 60pc shareholding in the Glanbia consumer products and agri-business.

The remaining 40pc will be owned by Glanbia plc. The remaining €40m leftover from the sale of shares will go to create a new fund to support prices to dairy and grain farmers in times of low prices and volatile markets.

Irish Independent





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