Shareholders at Lakeland Dairies have voted in favour of merging the two companies – making the new entity the second-largest dairy processor in the country.
Lakeland has passed the motion with a majority of over 97%, while earlier on this afternoon LacPatrick shareholders backed the merger by 96%.
The vote was reached by majority decision today (Tuesday, October 23) after larger-than-expected turnouts at two separate Special General Meetings (SGMs) – held by Lakeland Dairies at Hotel Kilmore in Co. Cavan, and by LacPatrick Dairies in Cookstown, Co. Tyrone.
At the Lakeland SGM shareholders also voted on three merger resolutions: the approval of the merger; the issuing of bonus shares; and amending current Lakeland rules to maintain the existing representative structure until the merger goes through.
The registered name of the new co-operative will be Lakeland Dairies Co-Operative Society Limited.
It is understood that the current share value at LacPatrick Dairies will more than treble; while at Lakeland Dairies shareholders are being offered doubled shares.
A new set of rules for the new society will also be brought in, pending approval from members. The new rules will be based on existing Lakeland rules with some modifications to allow alignment between the two broadly similar rule sets.
The decision follows months of meetings, deliberations and consultations between both entities and their respective shareholders and suppliers in a bid to communicate the strategic benefits of the then proposed merger with a specific focus on highlighting operational efficiencies, market access, Brexit assurances that could be achieved.
The combined size of the two co-ops to a globally-competitive scale, product diversification and enhanced flexibility and sustainability through reduced volatility risks were also key points made by both sides.
Transitional Board
A transitional board will be established for the first 12 months following the merger, with the existing representative structures of both co-ops remaining in place during this time.
This board will be made up of all current board members of Lakeland (12 elected and 3 co-opted Lakeland board members), and eight board members from the LacPatrick board.
Following a review of shareholder representation and governance, new society rules will provide for a total of 16 electoral areas.
These will be the existing 12 Lakeland areas – and one new Republic of Ireland Lakeland area – plus three Northern Irish electoral areas, comprising the existing LacPatrick Northern areas.