In a number of proposals, Glanbia co-op seeks to buy 60% of the consumer and agri businesses from the plc, spin out €100m to shareholders and create a €40m support fund for members.

The first proposal is for Glanbia co-op to acquire 60% of the consumer and agri businesses that currently sit 100% in the plc. This will see the creation of a new entity called Glanbia Ireland, which will bring together Glanbia Ingredients Ireland, Glanbia Agri and Glanbia’s consumer division.

As part of the agreement, Glanbia Co-op proposes to pay €112m for the 60% share, funded through a 3% share sale. The plc will own the other 40%. Glanbia Ireland will have sales of €1.5bn (growing to €2bn by 2020), control a 2.4bn litre milk pool, will subsume the milk processing joint venture GII (Glanbia Ingredients Ireland) and will also include the liquid milk business and grain and feed business currently wholly owned by the plc

Glanbia Ireland will invest between €250m and €300m in dairy processing by 2020. This is on top of the €430m invested in dairy processing and grain handling since 2012. It will have a minimum profit margin target of 3.2%.

The co-op is also proposing to spin out a further 2% of its shareholding in the plc (valued at €100m based on a share price of €17.13) and return these plc shares to co-op members. For every 1,000 co-op shares held, the member will receive 154 shares in the plc valued at €2,600 (based on a value of €17.13 per share).

The board of Glanbia Co-op also proposes to create a €40m member support fund. This will be 50% funded through the sale of Glanbia plc shares with the balance from co-op resources. These proposals will see the co-ops shareholding in the plc reduce from 36.5% to 31.5% with the flexibility to go to 28% in time.

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Full coverage: Glanbia