FDBusiness.com

Glanbia, the global nutritional solutions and cheese group, has signed contracts with its majority shareholder, Glanbia Co-operative Society, to enter into a joint venture in respect of Dairy Ingredients Ireland. Dairy Ingredients Ireland (DII) is a business unit of the Dairy Ireland division of Glanbia, including its 45% share of the Corman Miloko Ireland JV and its 23% shareholding in the Irish Dairy Board. Under the proposed transaction, the new joint venture, to be known as Glanbia Ingredients Ireland (GII) will be 60% owned by Glanbia Co-operative Society and 40% owned by Glanbia.

The existing DII business is the largest dairy ingredients processor in Ireland, assembling a milk pool of 1.6 billion litres and processing it into about 180,000 tonnes of dairy ingredients largely for export to over 50 countries worldwide. In 2011, DII generated revenue of Eur738 million, operating profit of Eur33 million and EBITDA of Eur44 million.

John Moloney, group managing director of Glanbia, comments: “At this point in our development we face clear strategic choices as we approach a post quota era. The proposed new joint venture is based on an existing, well invested and profitable international dairy ingredients business. This creates a strong platform from which to grow milk volumes and to capture the benefits arising from increased milk production and processing, post the abolition of milk quotas. The joint venture will ensure a continuation of strong and complementary links between the plc and the society within a structure that better accommodates the strategic interests of society members. It also enables Glanbia to continue its successful international growth strategy and to maximise value for all shareholders.”

If approved by both Glanbia Co-operative Society members and Glanbia shareholders, the joint venture transaction is expected to be completed by the end of the year. Glanbia Co-operative Society plans to subsequently reduce its shareholding in Glanbia from 54.4% to 41.4%.