Express to take over Glanbia in UK confirmed
By FWi staff
FOLLOWING industry speculation last week, Express Dairies has confirmed its intention to take over Glanbias UK milk operations for about £100 million in cash.
The takeover will be subject to the consent of Express shareholders which will be sought at an extraordinary meeting.
Application must also be made to the Secretary of State for trade and industry for confirmation that the merger will not be referred to the Competition Commission.
Neil Davidson, chief executive of Express Dairies said his company was now fulfilling its ambition of playing a leading role in the rationalisation of the UK milk industry after it demerged from Northern Foods in March last year.
“This we have now started to deliver,” he said.
Mr Davidson said that Glanbias UK milk operations are an “excellent fit with our own.”
“The integration of the two businesses over the next 18 months will enable us to achieve significant cost savings and efficiency improvements,” he said.
Although the rationalisation programme is expected to take up to eighteen months to complete Express directors believe it will benefit the companys income.
“This will enhance our earnings in the first full year after acquisition, in line with our commitment to deliver value to our shareholders,” said Mr Davidson.
Glanbia, formerly Avonmore Waterford currently rank as the UKs fifth largest liquid milk processor by volume of liquid milk sales with an approximate market share of 9%.
In the year ended 31 December, 1998, Glanbias UK milk operations reported an operating profit before exceptional items of £18.6 million.
Profit before taxation and exceptional items was £17.8m on turnover of £292.2m and net assets of £40.8m. However Glanbia has recently been losing market share.