Glanbia, the international nutritional ingredients and cheese group has agreed to dispose of its Irish dairy and agribusinesses to Glanbia Co-operative, its 54.6% shareholder.
The Irish dairy and agribusinesses comprise of three principal business units, Dairy Ingredients Ireland, Consumer Products and Agribusiness, as well as Glanbia Estates, Group Business Services and Irish Joint Ventures and Associates.
The disposal which is expected to be completed no later than 15 June 2010, will be approved by shareholders at an extraordinary general meeting to be held on May 25.
As a result of the disposal the Co-operative's share in Glanbia will reduce from 54.6% to 20%.
As well as the sale of these shares, which have been adjusted by a risk sharing mechanism, the Co-operative must agree a cash component of EUR49.7 million (US$64.3 million).
Glanbia has said that selling this part of the business will provide them with financial flexibility to develop its international business operations.
John Maloney, Group Managing Director of Glanbia said: "This transaction provides the prospect of reshaping the business and unlocking growth and development potential for both the Co-operative and the Company.
"For Glanbia it has compelling strategic logic and creates a focused business with a well established growth strategy, underpinned by improved financial flexibility.
"For the Co-operative, achieving full control of the Irish dairy and agribusinesses, will create a dynamic organisation focused on driving growth and development for farmer members."
Glanbia has released further information on financial figures to increase confidence among the Co-operative. The KPMG document provides further clarification for Glanbia Co-op shareholders on the basis for which the EBIDTA earnings and valuation figures were arrived at, so that farmers know that the business can move forward and expand.
A vote will be held by shareholders today (May 10), to decide whether they want to regain full control of their own processing facilities.
