Lakeland Dairies Co-operative Society Limited and LacPatrick Co-operative Society Limited have jointly welcomed regulatory approval, for the merger of both Societies, received today from the Competition and Markets Authority (UK) and from the Competition and Consumer Protection Commission (Ireland).
The Competition and Merger Authority (CMA) in the UK and the Competition and Consumer Protection Commission (CCPC) in Ireland have ruled that the merger can now be completed. Both authorities determined and ruled that competition would not be adversely affected as a result of the merger and both cleared the transaction unconditionally.
The regulatory authorities’ clearance was the last significant hurdle for the merger to go ahead.
In October 2018, the Lakeland and LacPatrick shareholders voted 97% and 96% respectively in favour of forming one of the largest dairy processors in Europe.
The new Society – to be called Lakeland Dairies Co-Operative Society Limited – will be the second largest dairy processor on the island of Ireland with a cross-border milk pool of 1.8bn litres, produced by 3,200 farms from 15 counties. The new co-op will have a combined annual turnover in excess of €1bn, creating internationally competitive scale while ensuring efficient costs of operation.
Alo Duffy, Chairman of Lakeland Dairies said: “The merger will help us to create efficiencies across our organisation which will enhance value and maximise available market returns for the benefit of milk producers. I express our strong appreciation to the shareholders of both societies for their confidence in this historic development which will underpin the long term sustainability of our dairy farming enterprises for the future.”
Andrew McConkey, Chairman of LacPatrick Dairies, said: “We look forward to the continuing future success of Lakeland Dairies as a fully integrated dairy industry player, creating efficiencies and further added value for our milk producers with enhanced global market access for our high quality dairy products. The merger 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. With a large milk pool and well-invested dairy processing sites on both sides of the border, the new Lakeland will be a co-op of considerable scale. We will work in the long-term best interests of dairy farmers while serving our valued customers with even greater capability and an expanded range of high quality, value-added dairy products.”
New Society Start Date
A number of standard legal and administrative procedures will now be completed to enable the new Society to begin trading at the end of March. Until then, the two co-ops will continue to operate independently with each setting its own milk price.
Michael Hanley is CEO Designate of the new Lakeland Dairies.
He said: “We’re very pleased to have reached the conclusion of this process which is now a starting point for future significant progress. We are energised and ambitious to create strategic advantages in an intensely competitive market environment where we intend to ensure the best possible realisation of the benefits of this merger for our members and for all of our customers around the world.
“My management team and I will get to work immediately in order to drive efficiencies in the business and to make the new co-op a success. Significant work will have to take place to make the new organisation as efficient as possible and to return the strongest possible milk price back to our farmers. The combined businesses have the potential to be one of the powerhouses of the global dairy industry but we must work hard to realise that potential by creating economies of scale and combining our complimentary product mix. We will leave no stone unturned in continuing the growth, development and success of Lakeland Dairies.”