Glanbia co-op approves dairy joint venture
GLANBIA has secured a deal to hand direct control of its Irish dairy subsidiary to a farmer-led cooperative which will agree to reduce its majority shareholding in the Irish food group.
Glanbia hopes the move will allow it to focus more on its high-margin U.S. cheese and international nutritionals businesses away from its lower margin dairy processing.
Members of Glanbia Co-op Society Ltd voted to approve the purchase of 60pc of Glanbia subsidiary Dairy Ingredients Ireland via a new joint venture. Glanbia will retain the remaining 40 percent.
The deal, which will reduce the co-op's stake in Glanbia to 51.4pc from its current 54.4pc is expected to be approved in a vote of Glanbia shareholders on November 20.
The vote paves the way for a second ballot for the co-op to cut its stake by a further 10pc to 41pc. That vote will be held in two stages on November 28 and December 12.
That vote, however, would require the approval of 75 percent of shareholders, above the 71pc who voted in favour of the joint venture on Wednesday.
Glanbia Chief Executive John Moloney said the vote marked a "significant and penultimate step" to the creation of the joint venture, which he said would allow the co-op's farmers to boost processing capacity and maximise the benefits of the abolition of European Union milk quotas in 2015.
Glanbia shares were up 0.3pc at lunchtime ahead of the broader Irish market which was down 1.5pc.