by Sarah Hills FoodBizDaily.com London
March 10 2010 - Glanbia is in talks with its major shareholder, Glanbia Co-operative Society Limited, regarding the potential disposal of its Irish Dairy and Agri Businesses.
Glanbia, an international nutritional ingredients and cheese group, based in Ireland, said that the society - a 54.64% shareholder - has expressed an interest in acquiring Glanbia's Dairy Ireland operations.
This would incorporate its three business units: Dairy Ingredients, the largest dairy processor in Ireland; Consumer Products, a branded food supplier and the Agribusiness - as well as Glanbia's Irish property business, Group Business Services and related Irish Joint Ventures & Associates.
Such a move would allow Glanbia to increase its focus on international nutritional ingredients and cheese.
The announcement comes as the group published its full results for 2009 which showed that the Dairy Ireland division experienced a “very challenging year”.
Dairy Ireland revenue down 23.3% to €1,028.8m and operating profit pre exceptional was down 51.7% to €24m. EBITDA pre exceptional fell to €45.2m, compared to €69.9m in 2008.
Glanbia said that the most significant impact was the major loss in Irish Dairy Ingredients, but Consumer Products also experienced a very competitive market place and the Agribusiness suffered as a consequence of reduced farm spending.
The group stated that discussions regarding the disposal of Dairy Ireland were “underpinned by a clear strategic rationale and represent a unique opportunity to transform Glanbia”.
The society would gain full ownership and control of the key strategic businesses that are closely aligned with its interests, while Glanbia would “increase the group's focus on international nutritional ingredients and cheese, significantly improve financial flexibility and enhances development of its successful growth strategy”.
However, if such a transaction does take place it would be likely to involve a significant reduction in the society's ownership in the group and require the approval of society members and Glanbia shareholders.
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Glanbia plc
Address: Glanbia House Kilkenny, Ireland
Telephone: +353 56 777 2200
Fax: +353 56 777 2303
About Glanbia plc
Glanbia plc (Glanbia) is an Ireland-based international dairy, consumer foods and nutritional products company with operations in Ireland, Europe, Canada, China, United States and Nigeria. Its segments include Consumer Foods and Agribusiness & Property under Ireland business unit, and Food Ingredients and Nutritionals under International business unit. The Company is controlled by Glanbia Co-operative Society Limited (the Society), which holds 54.6% interest in the Company and is the ultimate parent of the Company. In March 2008, the Company announced the sale of its Pigmeat business. On August 22, 2008, the Company acquired Optimum Nutrition, Inc. (Optimum).