Arrabawn and Tipperary Co-op have entered exclusive talks on collaboration, right up to a merger between the processors.

The matter was discussed at separate outer board meetings called by both co-ops on Wednesday night.

Essentially this marks the start of a period of due diligence to establish valuations for the proposed merger. Members of both co-ops would have to vote in favour of any proposal and it would have to reach 75% in both co-ops. The merger would then have to be referred to the Competition and Consumer Protection Authority (CCPC).

"The exclusive exploratory process has been undertaken by the neighbouring co-ops with a view to creating a stronger entity within the Irish dairy industry," a statement from both co-ops has said.

"The milk pool of both would place a combined entity in the top four co-op processors in Ireland. Discussions are at an early phase with no decisions made around a potential transition.

"Further updates will be provided as appropriate. In the meantime, both co-operative societies will continue to operate their businesses as usual."

Tirlán

Rumours have surrounded the future of Tipperary Co-op for many months now, and this week the Irish Farmers Journallearned that Tirlán had also sounded out the possibility of doing a deal there.

A spokesperson said: “Tirlán Co-op has been in contact with Tipperary Co-op to seek the opportunity to discuss a proposal that we have shared for alignment between our respective co-ops.”

It seems that the Tipperary Co-op board has decided that the co-op’s future would be better tied in with its north Tipperary neighbour.