Lakeland Dairies and LacPatrick Dairies have reached agreement to merge following the unanimous approval of the Boards of both co-operative societies who are recommending the proposed merger to their respective shareholders.
The new co-op will become the second largest dairy processor on the island of Ireland.
Exclusive discussions about a possible merger started last June and have reached a positive outcome where the Boards of both societies are unanimously recommending shareholders to vote in favour of the merger at Special General Meetings which will be held on Tuesday 23rd October. Regulatory approval will also be required.
Lakeland Dairies and LacPatrick Dairies are neighbouring societies and both operate on a cross border basis exporting the vast majority of their output to global markets.
The amalgamation of Lakeland and LacPatrick is a coming together of two dairy co-operatives on the island of Ireland to form a strong force in the global dairy industry. Both co-operatives are highly successful agrifood industry players with excellent manufacturing facilities and complementary strengths and advantages in their various worldwide markets.
As an absolute priority, the combined new co-operative will work to support dairy farming families on a long term basis into the future by maximising market returns and paying a sustainable and competitive milk price in line with market conditions.
Owned and controlled by farmers, with over 3,200 milk suppliers and a collective milk pool of some 1.8bn litres, the new co-op will be the second largest dairy processor on the island of Ireland. It will have a combined annual turnover in excess of €1bn, creating internationally competitive scale while ensuring efficient costs of operation.
The announcement was made jointly by the Chairman of LacPatrick Dairies, Andrew McConkey and the Chairman of Lakeland Dairies, Alo Duffy, together with Michael Hanley, CEO of Lakeland Dairies who will be appointed Group CEO of the new merged co-operative society which will adopt the name of Lakeland Dairies.
Andrew McConkey, Chairman of LacPatrick Dairies said: “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.”
Alo Duffy, Chairman of Lakeland Dairies said: “This merger proposal is a once in a lifetime opportunity for both co-operatives to continue their strong progress in a very meaningful way. Both societies are committed to the long term wellbeing and economic success of dairy farming, milk producers and rural communities. The proposed merger will uphold these values and will lead to further scale, strength and sustainability for milk producers. It will enable us to process all of the milk sent to us, including the expanding output of our dairy farming members. It will create economies of scale and will secure our channels to global markets on a stronger, substantial and even more sustainable basis for the future. The Board of Lakeland Dairies is unanimously recommending the merger to our shareholders.”
Michael Hanley, CEO of Lakeland Dairies 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. The combined organisation will have substantial cashflow to underpin the development of the business. All of these factors will enhance the value of the merged societies for the benefit of all shareholders and milk producers.”
Lakeland Dairies will hold its SGM in Cavan and LacPatrick Dairies will hold its SGM in Cookstown, Co. Tyrone, at 1pm on Tuesday 23rd October, 2018.
Both co-operatives have written to their respective shareholders with details of the merger and will also hold a series of information meetings in advance of the SGMs across several counties, north and south.
The Boards of both co-operative societies are unanimously recommending shareholders to vote in favour of the merger.