Glanbia to sell 60pc of Dairy Ireland business to 'Co-op' for €112m
Glanbia has announced that it is to sell of 60pc of its Dairy Ireland segment to Glanbia Co‐operative Society Limited in a deal worth €112m.
Dairy Ireland is comprised of two businesses. Consumer Products is a supplier of branded consumer dairy products to the Irish market and long-life products for export.
Agribusiness supplies inputs to the Irish agriculture sector and is the leading purchaser and processor of grain and the leading manufacturer of branded animal feed in Ireland.
In 2016 the Dairy Ireland division had revenue of €616m and earnings before interest, tax and amortisation (EBITA) of €30.7m. The division has 1,100 employees.
As part of the agreement, Glanbia Co-op proposes to pay €112 million to acquire a 60% shareholding in the plc’s Dairy Ireland division.
Key deal highlights
- Glanbia Co-op also proposes a €100m* “spin-out” of Glanbia plc shares to members and the creation of a €40m Member Support Fund
- Glanbia Ireland will be a new strategic joint venture 60pc owned by Glanbia Co-op and 40pc owned by Glanbia plc
- Glanbia Ireland will be a €1.5 billion diversified business majority owned by Glanbia farmers.
- Glanbia Ireland will own leading consumer and agri brands such as Avonmore, GAIN Feeds, Kilmeaden Cheese, Premier Milk, mymilkman.ie and Wexford
- Financial strength of Glanbia Ireland business will allow it to fund a €250 - €300m investment programme to 2020 without a requirement for supplier contributions
- Flexible profit retention policy proposed, which increases ability to support farmer suppliers
- All proposals are subject to the successful conclusion of contract negotiations and the relevant shareholder approvals within both Glanbia plc and Glanbia Co-operative Society.
Glanbia Co-op and Glanbia plc have agreed to form a new entity, Glanbia Ireland, combining Glanbia Ingredients Ireland, Glanbia Consumer Products and Glanbia Agribusiness, as a joint venture 60pc owned by Glanbia Co-op and 40% owned by Glanbia plc.
This, it says builds on the successful Glanbia Ingredients Ireland (GII) joint venture established in 2012.