This transaction would reduce Dairy Crest’s shareholding in the Creamery from 80% to 30% and increase WMP’s shareholding from 20% to 70%. Any transaction will be conditional on the approval of WMP’s members and is expected to complete by the end of March 2010.
Dairy Crest’s proposed sale of part of its shareholding in the Creamery to WMP allows Dairy Crest to concentrate on its key brands and facilitates the recent trend for dairy farmers to own more of the milk processing supply chain.
The cash proceeds from the proposed sale of around €9m will be used by Dairy Crest to repay bank debt.
Dairy Crest will retain a minority stake in the Creamery and will continue to provide a range of services to Wexford, including packing and distribution, and will also sell Wexford branded cheese in the UK on behalf of the Creamery.
Martyn Wilks, executive MD of Dairy Crest’s Foods Division and outgoing chairman of Wexford Creamery, said: “We have enjoyed a long and positive relationship with WMP through our joint ownership of the Creamery, and this will continue. The strategy of Dairy Crest’s Foods Division is to increasingly focus on a small number of key brands and the transaction is another step in this direction. We will continue to work with WMP for the benefit of the Creamery.”
The chairman of Wexford Milk Producers, Michael Vaughan, said: “This is a tremendous opportunity for WMP to determine our own future. We’re pleased that Dairy Crest will retain a stake in the Creamery and will assist in the development of the business.”
Source: Dairy Crest
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