Glanbia Co-op shareholders clear the way for the creation of a new venture

Shareholders of Glanbia Co-operative Society have voted in favour of the creation of a new venture, Glanbia Ireland.

Approximately 2,400 eligible shareholders turned up to Punchestown Event Centre in Co. Kildare earlier today to cast their vote at the co-op’s Special General Meeting.

Co-op shareholders had been urged to vote in favour of the creation of the new joint venture, which is just one of a number of proposals that have been passed as a result of the vote.

All proposals were carried; close to 90% of all shareholders agreed to pass each of the proposals.

Shareholders passed plans for the co-op to pay €112 million to acquire a 60% shareholding in Glanbia PLC’s Dairy Ireland division; consisting of Glanbia Consumer Products and Glanbia Agribusiness.

As a result of this purchase, Glanbia Ingredients Ireland, Consumer Products and Agribusiness will form a new ‘strategic joint venture‘. This will be called Glanbia Ireland.

The €112 million needed to purchase the stake in Glanbia PLC’s Dairy Ireland division will be funded by the sale of 3% of the co-op’s shares in Glanbia PLC.

The new venture will be 60% owned by Glanbia Co-op and 40% owned by Glanbia PLC. It is hoped this venture will build on the Glanbia Ingredients Ireland (GII) joint venture, which was established in 2012.

Henry Corbally, Chairman of Glanbia Co-Op at the Special General Meeting at Punchestown Event Centre in Co. Kildare

With an expected annual revenue of €1.5 billion; Glanbia Ireland will own consumer and agri brands such as Avonmore, GAIN, Kilmeaden Cheese, Premier and Wexford.

The green light has also been given to the board’s proposed transfer, by way of a share ‘spin-out’, of 2% of Glanbia PLC’s issued share capital – this reportedly equates to approximately 5.9 million Glanbia PLC shares – to all existing members of the co-op.

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, this year.

This would be worth approximately €6,637 for a member with the average shareholding; for active dairy farmer members the average value of the spin-out would be €10,791 (based on the above share price).

Meanwhile, shareholders approved plans by the board of Glanbia Co-op to allocate €40 million of its resources to a Member Support Fund.

This Member Support Fund will be 50% funded through the sale of Glanbia PLC shares, with the balance set to come from co-op resources.

As a result of all these proposals being passed, Glanbia Co-op now holds 31.5% of the issued shares in Glanbia PLC, compared to 36.5% earlier this morning.