A legally binding agreement has been signed (Wednesday, December 8) by Glanbia plc to sell its 40% share in Glanbia Ireland (GI) for €307 million.

And, subject to the approval of shareholders, this legally binding deal will see the 40% stake sold to Glanbia Co-op.

That approval will be sought at a special general meeting (SGM) scheduled to take place, virtually, on Friday, December 17.

The sale, if successful, will  allow the plc to drive further growth and return capital to shareholders, the company said.

It added that proceeds from the sale will be primarily invested in growth opportunities with up to 50% of the proceeds being returned to shareholders via a share buyback.

Currently, GI operates as a strategic joint venture, 60% owned by Glanbia Co-op and 40% owned by Glanbia plc. GI is the largest milk processor and grain buyer in Ireland, producing a range of value-added dairy ingredients and consumer products as well as selling farm inputs. Glanbia Ireland operates 11 processing plants, 52 agri-retail branches and has over 2,000 employees.

The Co-op, meanwhile, has informed the plc that it is in the position, if required, to fund the cost of acquiring its 40% stake through a “combination of existing cash resources and debt facilities”.

Subject to approval of the proposed transaction, GIanbia Ireland and the Co-op will change their respective names following a transitional period. The word Glanbia will not feature.

A spokesperson said that shareholders will have a say in the new names.

Completion of the proposed transaction is expected to take place in the first half of 2022.

Glanbia Co-op has just over 7,000 shareholders who are eligible to vote at the SGM but they must register in advance to do so, and they are being urged to do so now, up until December 14.

If they fail to register, they will not be eligible to vote.