Glanbia Co-op Proposals – Questions and Answers

Dairy Co-op

Your questions answered on Glanbia Co-op Proposals, registration and voting.

Why now?

The Board of Glanbia Co-op believes the time is right to take 100% ownership of the key processing assets. A strategic review by independent financial advisory firm KPMG highlighted the strong benefits of this set of proposals. The move will allow Glanbia Ireland and Glanbia plc to focus on their respective strategies and forge their own paths into the future for the benefit of all.


What benefit will this proposal have on milk price?

These proposals are driven by our ambition to pay the best possible price for milk. The change in ownership model will ensure a single owner with a farmer-focused culture that will have a direct and immediate impact on prices for farmers. We will continue to invest for the future. The proposals will benefit in a number of ways:

  • Flexibility – The change in ownership will end the current shareholders’ agreement to operate to a 3.2% Profit After Tax (PAT) requirement. This allows for more flexibility with payments for milk and grain to the Coop’s suppliers.
  • Dividend - Under this proposed new ownership structure, a dividend will no longer be paid to the Plc, with more funds available for direct payments for milk and grain supplied.
  • New revenue streams – The proposed new Investment Fund is targeted at delivering additional new revenue streams. It will work alongside Glanbia Ireland’s value-add strategy.


How did you arrive at the price? Does this take into account all key factors such as Co-op supports for milk price payment?

Independent financial advisors, KPMG, had access to all of Glanbia Ireland’s accounts, forecasts and strategy documents. This allowed KPMG to undertake detailed analysis considering multiple valuation approaches and arrive at a full, informed view of the business and therefore advise the Co-op on negotiating the price. This transaction was subject to rigorous analysis and negotiation. Multiple elements were factored into price negotiations, including Pension Liability, Co-op Milk Price Support, Capital investment, Climate Action Bill, Regulations, Shareholders’ Agreement, Third Party Debt and other key factors. The transaction price favourably sits within the lower half of the benchmarked population of comparable companies.


Can you explain exactly what this Investment Fund is and what kind of assurances can you give us around the use of this fund?

The Investment Fund will be available to acquire new businesses and technologies with the aim of driving higher returns. It is part of an ambitious, long-term diversification strategy to deliver additional independent profit streams. There will be strong governance, with a strategy sub-committee of the Board reviewing any proposed investment and setting the performance criteria. There are no current proposals to deploy the Investment Fund and no Glanbia plc shares will be sold until the Coop has identified a suitable acquisition target or targets capable of delivering satisfactory investment returns. It is not expected that the Co-op will deploy the Investment Fund in the short to medium-term. It is important to note the Investment Fund cannot be used in the ongoing running of the company.


Are you planning to have in-person Information Meetings?

We are committed to ensuring that every shareholder will be given the opportunity to have their views heard. We are extremely conscious of the current public health guidelines and shareholders will be offered the opportunity to join a series of information sessions, either online, or if conditions allow, in person.


What does this mean for our relationship with Glanbia plc? Will our commercial arrangements end?

On completion of the proposed transaction, Glanbia plc will retain its current name and branding while Glanbia Co-op and Glanbia Ireland will adopt a new brand and separately a new name to be approved by shareholders. The current existing commercial arrangements between Glanbia Ireland and Glanbia plc will remain in place until the name change is implemented. After that point, Glanbia Ireland will have broad access to develop or sell any product in any market. We will continue to have strong relationships with Glanbia plc who are the biggest customer in the world for whey protein isolate.


Why can’t we keep the ‘Glanbia’ name?

Glanbia plc will retain its current name as the legal owner while Glanbia Co-op and Glanbia Ireland will adopt a new name to be approved by shareholders. This had previously been set out in a shareholders’ agreement. The re-branding also provides an opportunity to build a strong, new identity for our Co-op.


Are the Board Members unanimous in their support for this proposal?

Yes, the Board unanimously supports putting these proposals before Members as we feel 100% ownership of the assets closest to your business is the strongest operating model for the future.

First Published 26 November 2021


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