Dawn Meats has announced this morning (Tuesday, August 12) that it has been selected by the board of Alliance Group as the preferred long-term strategic partner of the New Zealand-based meat producer.

The proposed partnership, which is subject to shareholder approval, would see Dawn Meats invest $250 million New Zealand dollars to acquire 65% of the shares in Alliance Group.

Farmer-shareholders in Alliance Group have been informed of their board’s preferred and unanimously recommended option.

In addition to shareholder acceptances, the transaction is also subject to New Zealand High Court and regulatory approvals.

If approved, proceeds from the proposed transaction would be used to reduce Alliance Group’s short-term working capital facility by NZ$200 million, accelerate the board’s strategic capital expenditure programme and enable the distribution of up to NZ$40 million to the Alliance cooperative, subject to shareholder livestock supply.

Commenting on the news, Dawn Meats chief executive officer Niall Browne said: “We are pleased to have been selected as the preferred long-term strategic partner of the Alliance Group and I would like to thank Alliance’s shareholders in advance for considering our offer.

“As the largest retail packer of New Zealand lamb in the UK, Dawn Meats is familiar with the high standards of the country’s grass-fed meat industry and its produce.

“We have worked closely with Alliance for many years in this regard, and we greatly admire the exceptional quality of their world class grass-fed lamb, beef and venison.

“Dawn Meats has a successful operating and investment track record in Ireland, the UK and in the EU.”

He added that having the ability to grow in partnership with some of New Zealand’s leading farmers and create a year-round supply for Dawn customers between the northern and southern hemispheres is an opportunity the company takes very seriously.

“Our ‘can do’, keep-it-simple and common sense culture aligns naturally with Alliance.

“The opportunity here is to create a dynamic industry competitor with a unique combination of customer relationships, resources, skills, routes to market and industry knowledge that will give us a powerful competitive edge, both locally and globally,” Browne added.

Mark Wynne, Alliance group chair, said the announcement comes after a two-year process to reset and recapitalise Alliance.

He said: “Alliance was built by farmers for farmers and has a proud cooperative legacy.

“The process we have undertaken on behalf of our farmer-shareholders to meet our banks’ requirements means we are now a much fitter and stronger business.

“However, we need this investment to provide certainty and confidence and ultimately unlock more value for our farmers.

“We are at a critical point where the business needs to evolve, but our commitment to farmers remains the same, and we believe Dawn Meats’ offer stands to secure and strengthen Alliance’s future.

The Alliance group representative added that with Dawn Meats’ balance sheet power, strength in beef and market access across the UK and Europe, and Alliance’s strength in lamb and market access across Asia, China and North America, there are significant commercial and operational synergies at stake.

He explained that this allows for potential for shareholders to see the value of their residual 35% stake grow over the long-term.

“The recapitalisation process explored several options in the interests of our shareholders and has successfully generated a very compelling offer, which the Board has unanimously endorsed,” Wynne added.

“We encourage all shareholders to attend the upcoming information sessions and vote to accept the offer.”

Business deal

The proposed transaction is to be implemented via a Scheme of Arrangement and will require a minimum of 75% shareholder acceptance of those who vote, and greater than 50% of all shareholding voting yes at a Special General Meeting (or via proxy) to be held in Invercargill in New Zealand in mid-October.

If shareholders do not support the proposed investment, the Alliance board has said it would be obligated to enter into a process led by its banking syndicate, which may involve possible asset sales, further site closures and further cost-reduction initiatives.

Dawn Meats is the supplier of choice to a range of supermarket, foodservice and manufacturing businesses, exporting to more than 50 countries.

As a family-owned business, Dawn Meats has relationships with over 40,000 family farms from which it directly sources grass-fed cattle and lamb for processing at its 11 Irish and 13 UK sites.

Dawn Meats was established in Co. Waterford in 1980, and has grown to a business with over €3 billion in annual revenue, employing over 8,000 staff in 10 countries.

Trading as Dunbia in the UK and Dawn Meats in Ireland, the combined businesses process approximately one million cattle and 3.5 million sheep annually.

Alliance is New Zealand’s largest processor and exporter of sheepmeat, and a key producer of pasture-fed premium beef with its quality produce exported to over 65 countries.

Owned by approximately 4,300 shareholders, the company operates six processing plants in New Zealand.

Business deal

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