Merger talks between Dale Farm Co-op and Aurivo Co-op are ongoing, the Irish Farmers Journal understands.

A series of member information meetings is being arranged by both co-ops to take place in March, the purpose of which is to explain to shareholders what is planned and to listen to member feedback on the proposed merger.

According to those close to the negotiations, there is agreement in principle by the boards of both co-ops to agree to the heads of terms of an agreement and the next steps in the process is to gauge member feedback to the proposed agreement.

ADVERTISEMENT

It is understood that the management of both co-ops expect to see significant cost savings from merging the two organisations.

These are expected to come in the form of better utilisation of existing processing facilities and in manufacturing higher-value dairy products.

Product mix

Dale Farm’s product mix is primarily in cheese and whey production, while Aurivo is a big player in liquid milk, powders and butter.

Any deal will have significant hurdles to overcome, not just from the membership where a 75% vote in favour will be required, but also from regulatory authorities both in the United Kingdom and Ireland.

In a note to milk suppliers this week, Dale Farm CEO Nick Whelan said: “Dale Farm and Aurivo are two financially strong co-operatives and joining forces would reduce costs, expand our value added offering and enhance long term returns for members.”