Ireland-based Lakeland Dairies and Northern Ireland-based LacPatrick Dairies have agreed to merge following the unanimous approval of both of the companies’ boards.
Merger discussions between the two companies started last June, and the merged co-operative will be the second largest dairy processor on the island of Ireland if the merger is approved, boasting an estimated annual turnover of €1 billion.
The boards of both companies have now recommended that the co-operatives’ shareholders vote to approve the merger at a conference held at the end of the month, and the merger will also be subject to regulatory approval.
Both businesses currently operate on a cross-border basis, and a merged business would be supplied by 3,200 farmers north and south of the Irish border, and will have a collective milk pool of around 1.8 billion litres.
Michael Hanley, the current CEO of Lakeland Dairies will be appointed as the group CEO of the proposed co-operative, which will adopt the name of Lakeland Dairies.
Hanley said: “I am confident that the best interests of the shareholders and milk producers of both societies will be best served through this merger.
“The economies of scale achievable by combining both societies will create a larger, more efficient, diversified, farmer controlled, global dairy food group with a broad portfolio of value-added products and brands. Both co-operatives have excellent facilities, technologies and resources with strong synergies across our milk processing footprint and in the markets we serve at home and abroad.
“We will be able to expand the potential of our overall portfolio of products, covering Food Ingredients, Foodservice and Consumer Foods. The business will have considerable potential to increase revenues and generate the cost savings necessary to ensure competitive milk prices for our dairy farmers in the future. It will continue to ensure market access to the United Kingdom, Europe and the world.”
Andrew McConkey, chairman of LacPatrick Dairies added: “The Board of LacPatrick firmly believes that an amalgamation with our neighbours in Lakeland Dairies is the best thing for our milk suppliers, shareholders and customers. It gives our farmers the necessary security to make long-term business decisions and provides stability for continuing progress in dairy farming for the next generation.
“The Board of LacPatrick is unanimously recommending our shareholders to approve this merger at our forthcoming SGM. With an enlarged milk pool and well invested dairy processing sites on both sides of the border, the new co-operative will be a co-op of scale working in the long-term best interests of dairy farmers, ensuring global market access and serving our valued customers with an even greater capability and an expanded range of high quality, value-added dairy products.”
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