Glanbia Co-op has agreed to become the outright and sole owner of Glanbia Ireland.

Friday afternoon's special general meeting (SGM) saw over 80% of over 4,500 attending co-op shareholders vote in favour of five linked resolutions. Ireland's largest dairy processor, handling three billion litres of milk this year, is now entirely farmer-owned.

Glanbia Ireland is also the largest grain purchaser in the country and the largest seller of meal to Irish farmers.

Online meeting

Voting took place following a two-hour meeting chaired by Glanbia Co-op chair John Murphy. The meeting, overseen by the Irish Co-Operative Organisation Society (ICOS), saw the resolution to purchase Glanbia plc's 40% shareholding in Glanbia Ireland for a price of €307m.

The other most significant resolutions required a two-thirds majority, both of all voting members and of active milk suppliers voting.

What it means

Glanbia Co-op now becomes the outright owner of Glanbia Ireland. The plc's nominees to the board of Glanbia Ireland will withdraw and the 3.2% profit margin requirement on Glanbia Ireland will cease, replaced by a less onerous 1.6% profit margin.

The board has the authority to add directors from within the co-op or from outside it.

Glanbia Co-op and Glanbia Ireland will have to change their name, as the plc will retain ownership of the Glanbia name after the 'divorce' of co-op and plc.

Glanbia Ireland

A spin-out of 12 million Glanbia plc shares will be shared among the 11,200 members of the co-op. The average shareholder will receive 789 plc shares, worth about €10,000 at current share price.

The co-op has permission to reduce its shareholding in the plc from the current 32.4% to 17%.

The spin-out accounts for about 4%, with another 4% earmarked to be sold when the share price is at an appropriate level for the partial payment of the purchase of Glanbia Ireland. The purchase will initially be funded by a combination of borrowing and cash reserves.

This essentially leaves the board of Glanbia Ireland with discretion to reduce the residual shareholding from 24% to 17% - with the existing 3% "contingency for general business purposes" retained alongside the 4% "discretionary fund for acquisitions or investment".