By FWi staff

GOLDEN Vale, the Irish food and dairy products group, has been the centre of take-over speculation this week following an initial bid by its larger rival Kerry Group.

The first approach for a reported Euro218 million (133m) has been rejected, but a spokesman for the Irish Farmers Association expected a deal between the two companies would be brokered.

“The feeling is it will happen. This is just the initial part of the bargaining process.”

If it did the new entity would have a combined milk pool of 1.09bn litres, about a fifth of the annual Irish milk output.

Both the Irish Farmers Association and the Irish Creamery Milk Suppliers Association back the move.

A take-over would significantly increase shareholder value and, with such vast quantities of milk, the bigger company should be able to negotiate the best returns from the market place, which can be passed on to farmers.

Under the terms of the first bid, Golden Vale suppliers would have board representation at Kerry Group.

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