January 18, 2012

In a deal worth almost GBP280 million (US$429 million), Robert Wiseman, with a major processing dairy in Somerset, has agreed to be taken over by German giant Muller Dairy.

Glasgow-based Wiseman confirmed last week it was in talks with Muller after a sharp rise in its share price. The company, which operates seven dairies across the UK and supplies around one third of the fresh milk consumed each day, pays farmers more for their milk than Muller but West farmers' leaders said there is no need for suppliers to panic. Both Wiseman and Muller said the deal opens "significant opportunities".

Rob Harrison, new chairman of the South West Dairy Board said: "I wouldn't have thought West Country farmers should be worried. Any consolidation in the dairy industry is good."

National Farmers' Union spokesman Ian Johnstone, said: "I think it is a time of uncertainty but I don't think farmers should panic. But Wiseman is a big company providing a lot of employment and at a time of a flat employment market farmers will also be thinking of those employees." Muller makes yoghurts and potted desserts and has one plant in Shropshire which is the headquarters of Muller (Dairy) UK.

It is thought that the two operations are complimentary and that it may be "business as usual" for Wiseman's suppliers if the deal is backed by shareholders.

Robert Wiseman said: "The combination of Muller and Wiseman makes strong commercial and strategic sense, creating a leading integrated dairy business in the UK with complementary positions in the yoghurt and potted desserts market and the fresh milk market.

"Wiseman has its origins as a family business and, since listing in 1994, my family has retained a significant stake in the business. It is heartening to know that the business will become part of another family-owned business in Müller." The recommended cash offer of GBP3.90 (US$5.98) per share is 60% above the value at close of Robert Wiseman's shares last Thursday, a day before the start of the offer. The deal means the Wiseman family, which owns 35% of the company, will receive a total of GBP98 million (US$150 million). Exactly half of that sum will go to executive chairman Robert Wiseman.

Heiner Kamps, chief executive of Muller, said: "The combination of these complementary businesses will form a leading dairy player offering a range of exceptional products to our customers across the UK. This will create significant opportunities which will benefit suppliers, customers, consumers and employees." The recommended cash offer per share in Robert Wiseman is GBP3.90 (US$5.98).