Farm Ireland
Independent.ie

Thursday 25 May 2017

Farmers set for €10,000 Glanbia windfall if €1.5bn business deal goes ahead

Glanbia PLC – the €5.2bn stockmarket-listed company that is 36pc-owned by farmers through the Co-op – revealed plans to create a new entity called Glanbia Ireland. Photo: Finbarr O'Rourke
Glanbia PLC – the €5.2bn stockmarket-listed company that is 36pc-owned by farmers through the Co-op – revealed plans to create a new entity called Glanbia Ireland. Photo: Finbarr O'Rourke
John Mulligan

John Mulligan

Farmers across south Leinster and east Munster will share average windfalls of more than €10,000 if they back plans to create a €1.5bn business that will include Glanbia's Irish consumer brands such as Avonmore and Kilmeaden.

Almost 15,000 Glanbia Co-op farmers will split a €105m windfall if the deal goes ahead. Based on a price of €17.13 a share, that will see co-op members with an average shareholding receive about €6,600 worth of shares each.

However, for active dairy farmers the average payout will be close to €11,000, with smaller payments for retired Co-op members.

Glanbia shares rose to €17.84 yesterday, however, which means the windfalls could be higher by the time all of the details are hammered out.

Glanbia plc - the €5.2bn stockmarket-listed company that is 36pc-owned by farmers through the Co-op - yesterday revealed plans to create a new entity called Glanbia Ireland.

Sales of €1.5bn a year will make it the biggest dairy company in the country, with 1,800 employees.

Glanbia’s consumer brands include Kilmeaden cheese
Glanbia’s consumer brands include Kilmeaden cheese

If the deal goes ahead, the Co-op will own 60pc of the new company. Glanbia plc will own 40pc. Glanbia's existing Irish consumer food brands will become part of Glanbia Ireland, while the stockmarket-listed Kilkenny-based plc will focus more on its global ingredients and other businesses.

It's the second stab the pair are having at creating the new joint venture. A previous effort, in 2010, failed to secure the necessary backing from Co-op members.

An existing joint venture between the Co-op and Glanbia - Glanbia Ingredients Ireland - will form the backbone of the new business.

As part of the deal, Glanbia Co-op will sell 3pc of its 36.5pc stake in Glanbia plc to fund the €112m cost of buying the 60pc share of the venture. It will then split 2pc of its holding, or about 5.9 million Glanbia plc shares, among its members.

Irish Independent