Farm Ireland

Saturday 17 March 2018

Glanbia to sell 60pc of Dairy Ireland business to 'Co-op' for €112m

Photo Mark Stedman/Photocall Ireland
Photo Mark Stedman/Photocall Ireland
Ciaran Moran

Ciaran Moran

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, 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.

Also Read

Glanbia Co-op has also announced proposals to distribute by way of “Spin-out” 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 February 17, 2017.

While discussions are said to be at an advanced stage, the Proposed Transaction is subject to the negotiation of inal transaction related agreements and an approval vote of the shareholders of both Glanbia and the Society, with completion expected by mid‐2017.

Glanbia says in creating a new Glanbia Ireland business the shareholders will create a strong organisation having the ambition to leverage the bene its of the significant growth plans of the Irish dairy supply base with an ownership structure more aligned to the needs of that supply base.

It says the new venture "Glanbia Ireland" will build on the investment programme to date with plans for further strategic investment of approximately €250 million ‐ €300 million between 2017 and 2020 to increase processing capacity and drive value.

This investment will largely be funded by debt facilities within the new "Glanbia Ireland" business, it says.


Glanbia also announced its 2016 full year results today. The group delivered a strong performance in 2016. Total Group revenue for the period, including the Group's share of Joint Ventures & Associates, was €3,697.0 million, an increase of 1.3% constant currency.

The Board is recommending a final dividend of 7.94 cent per share, bringing the total dividend for the year to 13.31 cent per share, representing an increase of 10% and returning almost €40 million to shareholders.

On a pro‐forma* basis Glanbia expects the adjusted EPS of the continuing Group to grow between 7% ‐ 10% constant currency in 2017.

Commenting today Siobhán Talbot, Group Managing Director, said: "I am pleased that Glanbia had a strong Group‐wide performance in 2016 delivering our seventh year of double digit earnings growth coupled with strong cash conversion. It has been an exciting start to 2017 with a number of key strategic initiatives progressing which will shape the future direction of the Group".

For Stories Like This and More
Download the FarmIreland App

Online Editors