Glanbia Co-op has announced that its shareholders have voted in favour of the proposal to take full ownership of dairy business Glanbia Ireland. More than 80 per cent of Co-op shareholders voted to approve the proposal at its special general meeting on Friday.
Glanbia Co-op had earlier agreed to pay €307 million to acquire the remaining 40 per cent shareholding in Glanbia Ireland from Glanbia plc.
The special general meeting took place in an online virtual format as permitted under current regulations.
"I'm delighted that shareholders have voted firmly in favour of this exciting development for our farmers," said John Murphy, chairman of Glanbia Co-op.
“It is an historic milestone in the evolution of our Co-op, which has delivered for our farmer members for over a century. We firmly believe that 100 per cent ownership of the world-class processing assets closest to our farmers’ interests is the right model for the future.”
Spin-out
Glanbia Co-op shareholders voted to transfer – via share spin-out – 12 million Glanbia plc shares to all existing members of the society.
Based on Glanbia plc’s closing share price of €12.43 on Thursday, this would be worth approximately €149 million.
“It is important that we return some of the value of our Glanbia plc investment to our members, with the proposed spin-out expected to occur in the summer of 2022. Our experience of previous spin-outs suggests our Co-op members retain their Glanbia plc shares as a longer term investment,” Mr Murphy said.
Shareholders also approved the creation of an investment fund, a 2022 member distribution reserve and changes to the governance of the Co-op.
“The Board’s motivation for making these proposals was very simple – we want to pay the best possible price for milk and grain to farmers. These proposals allow us greater flexibility to support our farmers into the future,” said Mr Murphy.
Glanbia Co-op and Glanbia Ireland chief executive Jim Bergin said the Glanbia Ireland business, which has more than €2 billion in revenue, would now have the "optimal business structure" for the next phase of its evolution.
Next vote
Glanbia plc’s independent shareholders will now vote on the proposal at an extraordinary general meeting expected to occur in the first quarter of 2022, and, if approved, the transaction is expected to be completed in the first half of 2022.
Glanbia Co-op is in a position to fund this transaction, if required, through a combination of existing cash resources and debt facilities.
Glanbia plc will retain its current name, while Glanbia Co-op and Glanbia Ireland will adopt a new name. A process commenced to select the new identity and approval will be sought from Co-op shareholders in due course.
The main existing commercial arrangements between Glanbia Ireland and Glanbia plc will remain in place until the name change is implemented.
