LONDON, UK: Glanbia plc and Glanbia Co-operative Society Limited have signed a non-binding memorandum of understanding (MOU) for the sale of the 40% interest in Glanbia Ireland DAC to Glanbia Co-op for a purchase price of €307 million.
Commenting today, Donard Gaynor Chairman of Glanbia plc said: “Glanbia Ireland has a successful heritage, and for many years we have valued the partnership with Glanbia Co-op in creating a strong business under our joint stewardship. This is the right time for the Proposed Transaction.
The Co-op is the right owner to continue the strategic development of Glanbia Ireland for the benefit of the Co-op’s members, and the PLC can continue to maximise the opportunities for its own business in the post-Covid environment, with our focus on health, wellbeing and nutrition.”
Commenting today, Siobhan Talbot, Group Managing Director of Glanbia plc said: “Today’s announcement represents the next stage of our transformation journey following many years of successful collaboration with Glanbia Co-op as joint venture partners in Glanbia Ireland.
If approved, the Proposed Transaction will continue the alignment of our portfolio to our strategy, which is focused on driving growth through our market leading positions as a brand owner and ingredient solutions provider, playing into strong underlying consumer health and wellness trends.
We expect to deploy the capital received from the Proposed Transaction in investment to drive further growth and to return capital to shareholders.”
The proposed transaction is consistent with the Glanbia PLC’s strategy to focus on its two growth platforms, Glanbia Performance Nutrition (GPN) and Glanbia Nutritionals (GN), as well as strategic joint ventures. The PLC will increasingly focus on its global nutrition strategy as a brand owner and provider of value added nutrition solutions, serving high growth markets.
The proceeds from the proposed transaction will be primarily invested in growth opportunities with up to 50% of the proceeds being returned to shareholders via a share buyback.
Transaction consideration fixed at €307 million, expected to be paid in cash, and not subject to any adjustment mechanisms post completion. Glanbia Ireland and Glanbia Co-op will change their respective names following a transitional period post completion to names which do not include “Glanbia”.
Glanbia Ireland is a joint venture owned 60% by Glanbia Co-op and 40% by the PLC. GI is the largest milk processor and grain buyer in Ireland, producing a range of value-added dairy ingredients and consumer products as well as selling farm inputs. GI operates 11 processing plants, 52 agri retail branches and has over 2,000 employees.
In the 2020 financial year on a 100% basis, GI generated €1,906.2 million in revenue and a profit after tax of €60.0m.
GI contributed €23.9 million to the share of results of Glanbia equity accounted investees in the 2020 financial year, equating to approximately 8.5 cent of PLC adjusted earnings per share.
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