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Lakeland Dairies and LacPatrick Dairies to Merge

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Lakeland Dairies and LacPatrick Dairies to Merge

Lakeland Dairies and LacPatrick Dairies to Merge
October 08
09:35 2018

Lakeland Dairies and LacPatrick Dairies have agreed to merge. The amalgamation of Lakeland and LacPatrick is a coming together of two dairy co-operatives on the island of Ireland to form a strong force in the global dairy industry. Both co-operatives are highly successful agrifood industry players with excellent manufacturing facilities and complementary strengths and advantages in their various worldwide markets.

Lakeland Dairies and LacPatrick Dairies are neighbouring societies and both operate on a cross border basis exporting the vast majority of their output to global markets. Each has a heritage of excellence in co-operative dairy farming spanning well over a century and share common business development aims in the interests of their shareholders, milk producers and rural communities.

Exclusive discussions about a possible merger started last June and have reached a positive outcome where the Boards of both societies are unanimously recommending shareholders to vote in favour of the merger at Special General Meetings which will be held on Tuesday 23rd October next. Regulatory approval will also be required.

As an absolute priority, the combined new co-operative will work to support dairy farming families on a long term basis into the future by maximising market returns and paying a sustainable and competitive milk price in line with market conditions.

Owned and controlled by farmers, with over 3,200 milk suppliers and a collective milk pool of some 1.8 billion litres, the new co-op will be the second largest dairy processor on the island of Ireland. It will have a combined annual turnover in excess of €1 billion, creating internationally competitive scale while ensuring efficient costs of operation.

Michael Hanley, CEO of Lakeland Dairies, will be appointed Group CEO of the new merged co-operative society which will adopt the name of Lakeland Dairies.

Andrew McConkey, Chairman of LacPatrick Dairies, said: “The Board of LacPatrick firmly believes that an amalgamation with our neighbours in Lakeland Dairies is the best thing for our milk suppliers, shareholders and customers. It gives our farmers the necessary security to make long term business decisions and provides stability for continuing progress in dairy farming for the next generation. The Board of LacPatrick is unanimously recommending our shareholders to approve this merger at our forthcoming SGM. With an enlarged milk pool and well invested dairy processing sites on both sides of the border, the new co-operative will be a co-op of scale working in the long term best interests of dairy farmers, ensuring global market access and serving our valued customers with an even greater capability and an expanded range of high quality, value-added dairy products.”

Alo Duffy, Chairman of Lakeland Dairies, said: “This merger proposal is a once in a lifetime opportunity for both co-operatives to continue their strong progress in a very meaningful way. Both societies are committed to the long term wellbeing and economic success of dairy farming, milk producers and rural communities. The proposed merger will uphold these values and will lead to further scale, strength and sustainability for milk producers. It will enable us to process all of the milk sent to us, including the expanding output of our dairy farming members. It will create economies of scale and will secure our channels to global markets on a stronger, substantial and even more sustainable basis for the future. The Board of Lakeland Dairies is unanimously recommending the merger to our shareholders.”

Michael Hanley commented: “I am confident that the best interests of the shareholders and milk producers of both societies will be best served through this merger. The economies of scale achievable by combining both societies will create a larger, more efficient, diversified, farmer controlled, global dairy food group with a broad portfolio of value-added products and brands. Both co-operatives have excellent facilities, technologies and resources with strong synergies across our milk processing footprint and in the markets we serve at home and abroad. We will be able to expand the potential of our overall portfolio of products, covering Food Ingredients, Foodservice and Consumer Foods. The business will have considerable potential to increase revenues and generate the cost savings necessary to ensure competitive milk prices for our dairy farmers in the future. It will continue to ensure market access to the United Kingdom, Europe and the world. The combined organisation will have substantial cashflow to underpin the development of the business. All of these factors will enhance the value of the merged societies for the benefit of all shareholders and milk producers.”

CAPTION:

Pictured (left to right): Andrew McConkey, Chairman of LacPatrick Dairies; Michael Hanley, CEO of Lakeland Dairies; and Alo Duffy, Chairman of Lakeland Dairies.

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