Lakeland/LacPatrick talks turn exclusive
Lakeland Dairies has emerged as the likely buyer for rival dairy LacPatrick, after the two sides entered exclusive amalgamation talks.
The boards of LacPatrick Dairies and Lakeland Dairies have agreed to enter into exclusive discussions regarding an amalgamation of the two Societies, they said in a joint statement.
Any agreement will remain subject to approval - by members of both cooperative - as well as regulatory clearances.
A deal has been in the works since April, when LacPatrick's board said it was pursing a number of strategic options for the business.
LacPatrick is one of the biggest dairy co-ops in the Border region, as is neighbouring Lakeland.
Cavan-based Lakeland had emerged early as the most likely merger partner, although Aurivo, Dale Farm and Glanbia had all expressed an interest.
Co-op members will have the ultimate say on whether a deal does go ahead between LacPatrick and Lakeland, and any merger would need backing from 75pc of LacPatrick's members.
LacPatrick was formed from the merger of the old Town of Monaghan Dairy in the Republic and Ballyrashane Diary in Co Tyrone.
It processes more than 600 million litres of milk from more than 1,000 farmers, roughly half on each side of the Border.
A major capacity expansion last year saw LacPatrick opened a €33m plant in Artigarvan, Co Tyrone, but it has struggled to match rivals' milk prices to suppliers.
LacPatrick's sale process has been run by a board subcommittee including chairmen Andrew McConkey and vice-chairman Robert Skelton and Keith Agnew, with EY as adviser.