The proposed merger of the dairy co-operatives Ballyrashane and Town of Monaghan has been strongly endorsed by the votes of shareholders at meetings this week.

The Irish Farmers Journal understands that there was 97% support at the meeting of Ballyrashane Co-op members, with over 90% of them in attendance to register their vote. There are around 80 members and at least half had to be present and 75% had to vote in favour for the co-operative society to make such a decision.

At Town of Monaghan, 88% voted in favour of the deal. Over 350 attended, of which 263 were entitled to vote.

Under co-op rules, the decision still has to be ratified by majority votes at further meetings of the members of each of the organisations three weeks after the first meeting.

There is no requirement for over half of the members to actually be present to vote at those meetings.

On enquiry, the respective chief executives, Gabriel D’Arcy of Monaghan and Nigel Kemps of Ballyrashane, said they were delighted with the level of endorsement from both sets of shareholders for the merger. They are now entering into the formal cooling off period with “cautious optimism”.

It is hoped the new co-op will be legally constituted and commence operation from 1 September.

Nigel Kemps said he was delighted with the turnout of shareholders and how they had shown their support for Ballyrashane’s strategy to pool its resources with Town of Monaghan, and collectively to create a significant new dairy force in Ireland.

Leaders of the two co-ops and financial advisers had been working on the terms of the merger since January and, following due diligence procedures, the respective boards of directors formally recommended the deal to their shareholders.

It is understood that the shares in the merged business, which is to be run as a producer co-operative society, would be approximately 15% to current Ballyrashane shareholders and 85% to shareholders in Town of Monaghan (approximately 490 of them).

Town of Monaghan also has a number of dry shareholders.

This follows due diligence procedures and valuations put on both businesses. Obviously, the leaders of each business see strengths that the other can bring to a merged entity and have managed to put the case to shareholders in a convincing manner.

It is expected that milk producers who supply but who aren’t shareholding members, of these co-operatives will be given the opportunity to become shareholders of the new co-op if they wish.

This includes new entrants to milk production in Northern Ireland or the Republic. There will be no compulsion to join, but it is hoped that people will want to be shareholders and to have a say in the co-operative.

Town of Monaghan has approximately 950 farmers supplying 460m litres annually, around 350m litres in NI.

Ballyrashane’s milk pool is slightly over 100m litres. Each of the co-ops employs around 150.