Aurivo and Dale Farm have decided not to proceed with merger talks and instead the co-ops have announced they will enter a strategic partnership where they will work together on a number of new projects.

The announcement last Friday came on the back of a series of Aurivo shareholder meetings, where it became clear that as well as a vocal minority firmly against the deal, others were hesitant to give it a ‘green light’.

According to Dale Farm chief executive, Nick Whelan, one of the main issues relates to the fact both co-ops are profitable and in a healthy financial state, so there isn’t an immediate problem to be solved.

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There is obviously the very emotive issue of losing control

However, perhaps the biggest hurdle was the concerns expressed about the headquarters of the newly merged entity being in NI.

“There is obviously the very emotive issue of losing control, particularly when it is cross-border. That’s a real issue for a lot of people,” he acknowledged. He believes that part of that is also a lack of understanding of what Dale Farm co-op is about among Aurivo shareholders in the west of Ireland, including around milk price and the fact it generates the highest profit margins of any major dairy processor in the UK or Ireland.

“When I went down, people didn’t know anything about Dale Farm – our products, [they asked] were we even a co-op? They had absolutely zero understanding of who we were,” he said.

Rather than try to push ahead and get 75% of shareholders in both co-ops to vote for a merger later this year, he said that all parties agreed to take a step back.

“We want to show that we are a good neighbour and we are someone you can work with. We are optimistic that over time, people will thaw out to the concept. We want a broad consensus. Both parties have to really want it,” said Whelan.

We are going to set up a very professional partnership here

To help build that trust, the two co-ops are to work together, starting out on three projects that involve new areas of work and opportunity for both businesses. Both co-ops will invest in these projects and a legal framework is to be put in place.

“We are going to set up a very professional partnership here. There will be proper governance, resources and capital because there are real opportunities,” said Whelan.