Aurivo Dale Farm union would create €1.5bn co-op

The proposed merger between Aurivo and Dale Farm would see the new entity become a €1.5bn co-op.

The new co-op would be called Aurivo Dale Farm and it would continue to have a presence at Aurivo’s Sligo headquarters, farmers were told this week.

The new company would be led by Dale Farm CEO, Nick Whelan, with senior appointments to be made on an “open and merit-based approach”.

A group of concerned suppliers has cited fears about the impact of the deal on Aurivo marts and Homeland outlets.

Extracts from the heads of terms document were presented at the supplier meetings this week, aimed at addressing some of these concerns.

This states that both parties “recognise the profitability generated by Aurivo agribusiness and marts are essential contributors to the overall sustainability of the business”, farmers were informed at the information meetings.

“The merged co-op confirms that any part of the business of the merged co-op that is profitable and does not require investment that would be commercially unjustifiable relative to the level of profitability generated, shall not be subject to closure,” farmers were told. Essentially, any part of the business that is making money will continue to operate if the deal is approved, according to co-op management.

Approval

Approval of the deal, should management decide to proceed after listening to feedback following the information meeting, will have to go to a vote of members of both Aurivo and Dale Farm.

It is proposed that a new board would be formed with 10 directors selected from Dale Farm and five from Aurivo.

There will be a chair and two vice chairs, one of which will always be from Aurivo. The board of the new co-op will meet in both Belfast and Sligo.

Both businesses have been valued, with Aurivo’s assets making up 30% of the new entity and Dale Farm making up 70%.

This valuation forms the basis of the 10:5 board split. There are over 7,000 shareholders in Aurivo and just 1,200 in Dale Farm.