Last checked at 23 Oct 2012 07:00
agreement reached to enter into a new dairy processing joint VENTURE WITH Glanbia Co-operative Society Limited - subject to shareholder approval
23 October 2012 - Glanbia plc ("Glanbia"), the global nutritional solutions and cheese group, is pleased to announce that, subject to relevant shareholder approval, the Group has signed contracts with its majority shareholder, Glanbia Co-operative Society Limited (the "Society"), to enter into a 40% (Glanbia) : 60% (Society) joint venture in respect of Dairy Ingredients Ireland (the "Joint Venture transaction"). This agreement follows the announced signing of a memorandum of understanding between the two parties on 29 August and is a further step towards the completion of the transaction. Details of the required shareholder approval processes are set out below.
Commenting, John Moloney, Group Managing Director of Glanbia plc said:
"At this point in our development we face clear strategic choices as we approach a post quota era. The proposed new Joint Venture is based on an existing, well invested and profitable international dairy ingredients business. This creates a strong platform from which to grow milk volumes and to capture the benefits arising from increased milk production and processing, post the abolition of milk quotas. The Joint Venture will ensure a continuation of strong and complementary links between the plc and the Society within a structure that better accommodates the strategic interests of Society members. It also enables Glanbia to continue its successful international growth strategy and to maximise value for all shareholders."
Joint Venture expected timetable and approvals:
13 November | Society Advisory Vote The Joint Venture transaction is conditional upon approval by certain members of the Society. The Society will organise a vote to be held at local polling stations in each of its representative regions. Approval for the Joint Venture transaction is required from in excess of 50% of eligible Society members who vote at the designated polling stations on the day. |
Late November | Glanbia Extraordinary General Meeting ("EGM"). The Joint Venture transaction is classified as a "related party transaction" under the Stock Exchange Listing Rules, as the Society owns approximately 54.4% of the issued share capital of Glanbia. Consequently, and subject to prior approval by Society members, completion of the Joint Venture transaction is conditional upon the approval of Glanbia shareholders (excluding the Society and its associates) at an EGM. A circular, prepared in accordance with the Stock Exchange Listing Rules, will be posted to Glanbia shareholders in early November. This document will contain details relating to the Joint Venture transaction and will convene the EGM. |
Late November/December | Transaction Completion If approved by both Society members and Glanbia shareholders, the Joint Venture Transaction is expected to be completed by the end of the year. |
Subject to the Joint Venture transaction receiving the necessary approvals, the Society will, at two separate Special General Meetings, seek member approval to reduce its shareholding in Glanbia to 41.4%. Dates for these meetings will be announced by the Society in due course.
ENDS
For further information contact:
Glanbia plc
Siobhán Talbot, Group Finance Director +353 56 777 2200
Shane Power, Group Investor Relations Manager +353 56 777 2244
Geraldine Kearney, Corporate Communications Director + 353 87 231 9430
Murray Consultants
Pat Walsh +353 87 2269 345
Note to Editors:
About the proposed new Irish dairy processing Joint Venture transaction:
The Joint Venture transaction incorporates the business and assets of Dairy Ingredients Ireland ("DII"), a business unit of the Dairy Ireland division of Glanbia, including its 45% share of the Corman Miloko Ireland JV and its 23% shareholding in the Irish Dairy Board. Under the proposed transaction, the new joint venture, to be known as Glanbia Ingredients Ireland ("GII") will be 60% owned by the Society and 40% owned by Glanbia. The business, net fixed assets, working capital and liabilities of DII will be transferred to the joint venture, which will also assume the relevant pension obligations of DII.
The existing DII business is the largest dairy ingredients processor in Ireland, assembling a milk pool of 1.6 billion litres and processing it into c.180,000 tonnes of dairy ingredients largely for export to over 50 countries worldwide. In 2011, DII generated revenue of €738 million, operating profit of €33 million and EBITDA of €44 million.