Glanbia Co-op confirmed the completion of the transaction to acquire full ownership of Glanbia Ireland on Friday 1 April 2022.

This is the completion of the deal that got co-op approval at a shareholder special general meeting on 17 December 2021.

Once the co-op got approval, the next step was the plc shareholders voting on the deal to sell the plc share in Glanbia Ireland to the co-op.

Glanbia Ireland previously operated as a strategic joint venture - 60% owned by Glanbia Co-op and 40% owned by Glanbia plc.

As previously announced, Glanbia Co-op is paying €307m to acquire Glanbia plc’s 40% shareholding in Glanbia Ireland.

Commitment

In order to fulfil its commitment to its members to pay the “best possible milk and grain price”, the board of Glanbia Co-op has agreed that Glanbia Ireland will create a milk and grain price provision of €43m.

This will be paid to suppliers over the next 12 months as the business transitions to a more flexible profit model rather than the rigid profit after-tax commitment that was in play in Glanbia Ireland.

How will the co-op pay for this?

On 20 January 2022, Glanbia Co-op announced that it had completed the funding arrangements for the transaction, with the placement of 5.75 million ordinary shares held in Glanbia plc (equivalent to approximately 2% of Glanbia plc’s issued share capital) at a price of €12.25 per share.

The share placement raised approximately €70m for Glanbia Co-op.

On the same date, Glanbia Co-op also confirmed that it had raised €250m through the launch of an equity-linked exchangeable bond. The five-year bond is linked to a pledge of approximately 15.1 million Glanbia plc shares (5.3% of the issued share capital).

At one stage, an option considered by the co-op was to sell this shareholding, but the creation of the bond with conditions attached means the shareholding remains with the co-op for the moment.

Spin-out of Glanbia plc shares to members

In November 2021, Glanbia Co-op also announced its intention to transfer, via share spin-out, 12 million Glanbia plc shares to the circa 11,200 members of the society. This spin-out is expected to be completed this summer.

Over the next few weeks, the rest of the Irish milk processors will outline the financial outcome for the 2021 financial year.

To align with the transaction completion date, Glanbia Ireland is extending its accounting year-end (on a one-time basis) from its usual 12-month period ending 1 January 2022 to a 15-month period ended 1 April 2022.

Its next accounting period will be a nine-month period to 31 December 2022.

Completed acquisition

Chair of Glanbia Co-op John Murphy said: “I am very pleased to confirm to Glanbia Co-op members that we have successfully completed our acquisition.

"Last December, our members voted overwhelmingly in favour of taking 100% ownership of the world-class processing assets closest to our farmers’ interests.

"The new ownership model will support Glanbia Co-op’s ambitions to build one of Europe’s leading co-ops, with greater flexibility to support members, pursue new opportunities and add value to our farmers’ high-quality milk and grain through innovation.”

Glanbia Co-op chief executive Jim Bergin said: “We are very ambitious for this great business and are excited by the opportunities presented by this natural evolution to a pure co-op model, with the added dimension of our investment fund.

“Our excellent workforce and leadership team are looking forward to launching our new identity, logo and branding later this year.

"I believe that this is an exciting opportunity to position our co-op strongly as a new ambitious organisation on global markets.”